Rents in Dubai rose by a total of 16 per cent in 2012 as confidence returned to the emirate's property market.
Dubai rents rise 16% as confidence returns to property market
Rents in Dubai rose 16 per cent last year as confidence returned to the emirate's property market.
According to a report by the property analyst CBRE, the average rents for apartments in the city increased by 17 per cent during the year and by 8 per cent over the final three months of the year.
Rents for villas in Dubai increased by 14 per cent over the year and by an average of 6 per cent during the final quarter.
However, with the market suffering from the effects of news last month that the Central Bank planned to cap mortgage loans for expatriate buyers at 50 per cent, researchers from CBRE said that they expected fewer sales this year than the previous year.
"Overall, the residential sector is forecast to continue its upward trend for sales and leasing rates, although given recent legislative changes, 2013 is perhaps unlikely to match the performance of the current year," said Matthew Green, the head of research at CBRE's Dubai office.
Yesterday, the Central Bank governor Sultan Nasser Al Suwaidi was quoted in The National's sister paper, Al Ittihad, as saying that while the Central Bank is working on new lending limits, it will not impose them without consulting commercial banks and they will take at least six to nine months to emerge.
Also in Dubai yesterday, the property adviser Jones Lang Lasallepredicted a further return to confidence for the emirate's property sector during the coming year.
"Factors like the UAE's economic growth, increased employment, Dubai's safe haven status and improved price/rental performance have led to continued market confidence," said Craig Plumb, the head of research at Jones Lang LaSalle's Dubai office at a press conference yesterday.
"With many real estate project announcements over the past six months, this increased market confidence has become more pronounced. The government is keen to create a more stable market environment as illustrated by the new mortgage caps from the UAE Central Bank."
But it was a different story for Dubai's embattled office sector.
CBRE researchers said they expected the office sector to remain under stress during this year, as supply continues to outstrip demand.