Apartment values drop in Dubai
Villa prices in Dubai remained stable in October but apartment prices fell by 1%, according to the latest real estate index to be published.
The data from market research firm REIDIN shows that cost of a villa actually appreciated slightly by 0.04% compared with September although overall prices fell by 0.87% in October.
And its figures for the third quarter of 2010 show prices are down 4.75% compared with the same period in 2009. Its residential index shows that apartment prices fell by 7.48% and villas rose by 0.9%.
It is clear that villa prices are outperforming the apartment sector. REIDIN’s villa index had increased by 0.07% in the first quarter of 2010 and by 1.45% in the second quarter. It reflects an ‘emerging optimistic sentiment in this specific segment’, REIDIN said.
And it is smaller apartments that are faring the worst. This sector, apartments of less than 50 square meters fell by 18.3% in October while those of 51 to 100 square meters dropped 7.94%.
Meanwhile, it has been revealed that Dubai based property developer Tameer Holding is repossessing hundreds of properties from defaulting owners. It has repossessed 200 units by the end of October and plant to act on a further 600 units.
‘We already know which customers are committed to the project and which ones are not. So we have a plan for termination done as per the regulations stipulated by the Land Department of Dubai,’ said president Frederico Tauber. It represents around 13% of the developer’s customers.
The Emirate’s commercial real estate sector is also performing poorly. Continued oversupply of office space in Dubai will see rents fall by as much as 20% in 2011, according to the latest research from Jones Lang LaSalle.
In its Real Estate Outlook for 2011, the consultancy predicted that both capital and rental values for Dubai commercial property would decline by between 10 and 20%, putting the emirate at the bottom of a survey of the world’s most important business cities.
‘Dubai has a significant overhang of vacant office space which will depress rents and take many years to absorb. Prime office space is now available with a 50% plus discount on its 2008 peak,’ the report says.