Property prices in parts of Dubai up by 50 per cent in 2013

Developments such as Jumeirah Village Circle, Tecom and Dubai Sports City had the biggest rises in leasing and sale, but there were huge increases across the board.

Developments including Jumeirah Village Circle, Tecom and Dubai Sports City have had the biggest rises in leasing and sales, but there have been huge increases across the board. Pawan Singh / The NationalShow less

DUBAI // Property prices and rentals increased by up to 50 per cent in some areas of Dubai last year, annual statistics released by the classifieds website Dubizzle show.

Developments including Jumeirah Village Circle, Tecom and Dubai Sports City had the biggest rises in leasing and sales, but there were huge increases across the board.

“2013 has no doubt been an eventful year in real estate here in the UAE,” said Ann Boothello, property marketing specialist at Dubizzle.

Ms Boothello said in the past 12 months there had been projects launched by developers in Dubai, property registrations fees doubled by the Dubai Land Department, and new rental decrees in Dubai and Abu Dhabi.

She said that in September last year Abu Dhabi’s “live locally policy”, whereby employees of government entities and companies had to live in the emirate, came into effect.

Then there was the Abu Dhabi Government's approval of Dh15.6 billion in infrastructure and welfare projects, and the long-awaited announcement that Dubai would host Expo 2020.

“These are a few of several interrelated dynamisms that have influenced the price trends seen in 2013,” Ms Boothello said.

“These are some of the highlighted topics that residents will factor in when looking back at the price shifts observed.”

Dubizzle says rents for two bedroom flats in Jumeirah Village Circle increased by 50 per cent, while one-bedroom flat rents in Tecom grew by 45 per cent.

“With units growing in demand in areas like JVC and lack of availability to satisfy this demand within those communities, these price shifts were inevitable,” Ms Boothello said.

Mario Volpi, managing director of Prestige Real Estate, said there had already been increases in certain areas of Dubai, such as the Marina and Downtown, in 2012, and over the past year the more affordable communities such as JVC had caught up.

“These areas were starting from a much lower base than the others,” Mr Volpi said. “These were like hidden gems. Those areas will continue to see even further rises as the area develops with facilities like shops and gyms.”

Other areas considered primary locations, such as Dubai Marina, Downtown and Jumeirah Lakes Towers, had smaller rental increases for one-bedroom flats, at 15 per cent, 16 per cent and 14 per cent.

With sale prices, the biggest price increases were for one-bedroom properties in JLT, which rose by 41 per cent, and three-bedroom apartments in Tecom, which rose by 42 per cent.

One of the only areas where prices decreased was in four-bedroom villas at Emirates Hills, with a 2 per cent reduction.

Craig Plumb, head of research at Jones Lang LaSalle, said the company’s own figures had rents and prices across the country rising by 20 per cent.

“We are describing 2013 as a broad-based recovery,” Mr Plumb said. “Prices did go up in most locations and I’m aware of hardly anywhere where they went down.

“Within that, there are areas where prices and rents have increased more than others.

“However, 20 per cent average price growth across the market is unsustainable. We are expecting prices and rents to continue to increase in 2014, but certainly not at those levels.”

He said there was a chance that prices could continue to grow at current rates, and that could pose a danger to the market.

“If that happened it would be a bubble because you would expect the market to eventually adjust downwards,” Mr Plumb said.

“However, if we see rents and prices increasing, but at a lower rate than 2013, we may avoid the need for a correction.”