The Dubai property market is showing good signs of a recovery, with many neighbourhoods reporting the first increases in value since 2008, a new industry report has revealed.
According to data released by global property consultant Jones Lang LaSalle, prices for luxury villas rose 3 per cent in the second quarter.
However, prices for apartments continue to slip, easing by 1 per cent for the quarter, with an abundance of supply available, the consultancy said.
Several factors will continue to drag on the market in the months ahead, including an additional 18,000 homes scheduled for completion by the end of the year, Jones LangLaSalle report said.
According to the report, retail mall rentals have remained unchanged over the past quarter, with the increase in tourist arrivals and the lack of new supply contributing to stability.
“Since many retailers expect better business in the third quarter, we anticipate that rental levels will remain roughly stable over the coming months, marking the bottom of the current cycle,” it said.
There are positive signs in the emirate’s market after three years of steady declines.
The report reflects what agents have been reporting in the market for the past six months.
Homes are selling for closer to asking prices even though only a few neighbourhoods are seeing increases.
Most new construction is apartments. By the end of this year, apartments will constitute 79 per cent of homes in Dubai, according to Jones Lang LaSalle data.
Meanwhile, Dubai’s hotel market continued to perform well, with occupancy rising to 81 per cent and Average Daily Rates (ADRs) stabilising.
Beach hotels registered the strongest improvement, evidenced by a 3 per cent growth in ADRs and 11 per cent growth in revenue per available room compared to the sameperiod last year.
Although supply is still expanding, the upward trend in tourist arrivals is expected to sustain the recovery, said the report.