Construction

Dubai residential market costs jumped 17% in 2012

Investor confidence is reflected in increased number of transactions

Property consultancy CB Richard Ellis released statistics on Sunday which showed an average rise of 17% in property over the past twelve months.

In popular locations, such as Downtown Dubai, Dubai Marina, Greens, Jumeirah Beach Residence  and Palm Jumeirah, the lease rate has increased 24% year on year.

Villa prices have dropped around 30% from Dubai’s peak period but over the last twenty four months there has been a pickup due to the lack of supply in established locations.

“Investor confidence is clearly growing and that is reflected in the increasing number of transactions taking place across the emirate. However the main focus for investments remains completed assets in established locations’’ said Mathew Green, Head of Research at CBRE.

And the demand of office space is also increasing. “We currently have demand for at least four corporations wishing to acquire 50,000 square metres or more” said MD Nicholas Maclean.

Overall the market is showing vacancy figures of up to 47% but that is not reflected in the strong demand for office space along the Sheikh Zayed road, for example.

Maclean points out that this strong demand may force investors to acquire buildings that are not their first choice. “There is a lot of foreign money trying to find investment in Dubai and investors are frustrated by the lack of available property” he said.

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