Property experts predict even more rises if expo bid is successful as sellers and landlords will 'try their luck by raising prices as much as they can'. With interactive graphic
Home buyers and renters feel the pinch in Abu Dhabi and Dubai
DUBAI // Property prices and rents are continuing to rise in the UAE's two largest cities, according to the latest statistics from classifieds website Dubizzle.
Figures for the second quarter of this year show big increases in the price of accommodation in Dubai and Abu Dhabi, and real estate analysts believe this trend could continue throughout 2013.
"The increase in itself isn't that surprising because the market is picking up," said Ann Boothello, a marketing specialist for property at Dubizzle.
"The amount of the increase in some areas is however significant, which is surprising."
According to statistics, Dubai Marina saw a 6 per cent increase in rents, with one-bedroom apartments costing about Dh95,000 per year, while three-bedroom properties in both Jumeirah Lakes Towers and the Greens and Views rose by 8 per cent to an average of Dh140,00 and Dh175,000 respectively.
Two-bedroom flats in Downtown Dubai rose by 7 per cent to about Dh150,000, while a four-bedroom villa in Arabian Ranches rose by 8 per cent to the region of Dh290,000.
In terms of sale value, the biggest increases were in The Villa, which saw prices for five-bedroom homes go up by 18 per cent to Dh5 million on average, while villas in Jumeirah Village Circle rose by 10 per cent to about Dh2 million.
Mario Volpi, head of sales and leasing at Cluttons, said the increases were in keeping with his experience of the UAE's housing market.
"Every other call we get at the moment is an enquiry about the Jumeirah Village area," he said. "Landlords and sellers are realising this and raising the price as much as they can."
In Abu Dhabi, although sale prices fell by 14 per cent to about Dh1.2million for one-bedroom properties in the Al Reem Island Gate District, they rose significantly in other areas. Four-bedroom properties in Al Reef went up in value by 7 per cent to about Dh2.1 million. Rents for one-bed flats in Al Reem Island Tamouh Marina Square increased up by 6 per cent to about Dh90,000.
Areas outside of the capital have also seen house prices fluctuate, although these tended to drop. In Madinat Zayed in the Western Region, rents for three-bedroom homes fell by 7 per cent to about Dh130,000.
Ms Boothello said it was important for tenants and owners to monitor the situation closely.
"It's important for renters and buyers to keep a close eye on the market now," she said. "With the prices picking up, it becomes even more important to find good rates."
Ms Boothello said it was impossible to tell whether the market would continue its growth over the next quarter, although Mr Volpi said he believed it would remain steady for now.
"As Ramadan begins, things will quieten down for a month or so," he said. "The next milestone is November, when we get to find out if Dubai has won the Expo2020 bid.
"If Dubai wins, it will really have a massive effect on the local economy. Although it isn't until 2020, it will attract greater international attention and, therefore, more tourism.
"In terms of the property market, that's going to see some further increases as landlords and sellers again try their luck by raising prices as much as they can."
He said infrastructure developments, such as the opening of the Al Sufouh Tram next year, could increase rents even further in Dubai Marina.
"Sadly, from a renter's point of view, there are potentially more increases to come," he said. "Landlords will look at what rents were in the past, and where we are now, and in theory if we get the expo bid, there's nothing stopping them asking whatever they like. Whether they actually get it is another matter."
However, he said tenants and buyers still have the final say in what a landlord can charge or seller can ask.
"I don't want landlords and sellers to read that and then just turn around and write their own cheque," he said. "There's going to come a time when people can't afford to live here."