DUBAI // Apartment prices in Dubai rocketed up by an average 12 per cent during the first three months of 2013 as the city witnessed a return to the days of rampant double digit house price inflation.
According to property broker Asteco, apartment sales prices are now a whopping 27 per cent higher than they were this time last year and villa prices are now 24 per cent higher.
Prices rose the fastest at Nakheel's Discovery Gardens apartment complex in Jebel Ali where they jumped 33 per cent to reach Dh6,450 (US$1,756) per square metre. Prices at Dubai Marina and Jumeirah Beach Residence, grew 14 per cent and 15 per cent respectively to Dh12,900 (US$3,512) and Dh12,400 (US$3,375).
Dubai's most expensive area was once again the Palm Jumeirah where apartment prices currently stand at Dh16,150 (US$4,397) per square metre and villa prices Dh20,450 (US$5,568) per square metre.
It was followed by Dubai International Financial Centre where prices stood at Dh15,600 (US$4,247) per square metre and Downtown Dubai where properties change hands at an average of Dh15,000 (US$4,083) per square metre.
House prices for villas in Dubai rose the fastest at Emaar's The Meadows where they increased 10 per cent during the quarter to reach Dh11,850 (US$3,226) per square metre. Prices at Nakheel's Jumeirah Islands and Jumeirah Village both rose 9 per cent to Dh13,450 per square metre Dh6,450 per square metre. However, it was Emaar's The Springs development which saw the highest year on year price rises, recording a 29% increase on the previous year at Dh9,700 per square metre.
The news comes just days after the UAE Central Bank met with banks to approve new caps on mortgage credit aimed at preventing a new property bubble.
In warnings reminiscent of the heady days of 2008, Asteco warned that Dubai was once again becoming too expensive for some of its inhabitants.
"The overall outlook is positive with demand and rates expected to continue to grow. However, this will also mean that some tenants and buyers will be priced out of certain buildings or communities," said John Stevens, Managing Director, Asteco Property Management.
Rents in the city also climbed significantly over the first three months of the year with average apartment rents up 3 per cent - reflecting a 19 per cent increase on this time last year.
Average villa rents rose 4 per cent between January and March - reflecting a 21 per cent increase compared with the same period last year.
Apartment rents grew most during the start of the year at International City where the cost of renting a two-bedroom flat increased by 8 per cent to Dh40,000.
The Palm Jumeirah also remained the most expensive area to rent, with a three-bedroom villa now costing Dh325,000 per annum.