Sales and rental prices in upcoming, inland neighbourhoods across Dubai and Abu Dhabi are rising while prime areas decline, according to new research.
The Q1 2016 property report by classifieds website Dubizzle.com reveals an increase of up to 13 percent in sales and rental prices in emerging communities such as Al Ghadeer, Al Reef and Al Furjan, when compared to the first quarter of 2015.
For example, property sale prices in Abu Dhabi’s Al Ghadeer and Al Reef rose by 3 percent and 4 percent respectively when compared to the same quarter a year ago, while rental prices for one- and two-bed apartments in Al Reef rose by 9 percent.
Three-bed apartments in Al Reef rose 11 percent, the report said, while Dubai’s Al Furjan saw a 13 percent hike in rental prices for one-bedroom apartments.
Meanwhile, prices in more established, central areas have dropped, for example rental costs dropped by 10 percent for one- and three-bedroom apartments in Abu Dhabi’s Corniche when compared to the first quarter of 2015.
The same trend was seen in Dubai, where sales prices for properties in mature locations such as Business Bay, Dubai Marina, Downtown Dubai and Jumeirah Lakes Towers all dropped – by 8 percent, 8 percent, 9 percent and 10 percent respectively.
Similarly, Business Bay recorded a decrease of 5 percent in rental prices of one-bedrooms, and 4 percent for two-bedrooms (the rental price for three-bedroom apartments remained unchanged).
Ann Boothello, product marketing manager for property at Dubizzle, said: “As we see real estate becoming more affordable in central communities, the price increase in less central and established areas indicates that the [market] is more family-oriented and people are seeking larger spaces for less.
“Areas such as Al Reef offer an environment that has more of a community feel, with children’s play areas, day-time flea markets and mums’ meet-ups – despite it being further out from Abu Dhabi city centre.”
Despite witnessing an increase of 4 percent in sale prices this year, Al Reef is still one of the most affordable communities in which to buy, with price per sq ft at AED860 ($234/sq ft), “making the community a solid option for potential investors”, Boothello added.
Rental and sales prices in inland Dubai communities indicate higher rental yields for those considering to invest in property, the report noted. For example, in Jumeirah Village Circle, the sale price per sq ft declined by 4 percent to AED894 ($243), while rental prices increased by 3 percent.
“While Sheikh Zayed road is the main artery of Dubai with more developed communities scattered along it, we are now seeing a gradual shift in property purchasing and rental behaviour towards newly developed areas located further in-land,” said Boothello.
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