OVERALL the real estate market in Dubai is positive with general price stability across the Emirate and some price rises noted in specific areas, according to the quarter three report from Cluttons.Apartments in Dubai have increased in value by an average 4.9 per cent since the beginning of 2012 and Cluttons predicts a continuation of this trend towards the end of the year.In addition, apartment rental values have increased 6.8 per cent in Dubai. However, Cluttons notes that averages can be misleading, as there were areas in the Emirate that did not see any growth.Average sales for high end villas rose from AED1,100 per square foot in January to AED1,300 per square foot in September 2012, whereas mid range villas have risen from AED550 per square foot to AED650 per square foot in the same period.Mid range villas have also witnessed a rise in sales price from just under AED750 per square foot in January to nearly AED900 per square foot in September of this year. Cluttons notes that villa prices now match prices of spring 2007.According to the Dubai Land Department, Dubai property transactions grew 21per cent to AED63 billion in the first half of 2012, compared to the third and fourth quarters of 2011.Cluttons also said that internal valuation instructions for both villas and apartments have increased some 23per cent since the fourth quarter of 2011 and 50per cent of these represent mortgages on new property acquisitions.Cluttons has also found that proximity to metro stations is a new factor which has quickly begun to affect popularity and prices this past year. The metro transport link has now established itself as a substantial variable, affecting an individual's decision when short listing property. The majority of areas close to the metro stations have maintained their demand and in most cases have increased in both capital and rental values.Dubai's strengthening property market is a reflection of the UAE's improving economic performance. According to a recent Merrill Lynch Global Research Report, GCC 2020, Dubai's diversification model has the right mix to accelerate growth.The report finds that Dubai's superior infrastructure investment and robust population growth has established solid foundations for future economic growth. Dubai is widely viewed as a regional financial, transport and logistics hub, placing it in an excellent position to benefit from regional growth.According to Dubai government published figures, foreign investors buying real estate were responsible for acquisitions of AED28.3 billion in the first half of 2012, up 36per cent from the same period last year.In addition, trade license applications were up 9per cent in July 2012 compared to the same monthly period in 2011, according to the Department of Economic Development, giving a strong indication of improved business confidence in the Emirate.Cluttons predicts that prices will remain relatively stable over the next 12 months, as the 24,000 residential units scheduled to be delivered in the second half of 2012 will bring a large stock of supply onto the market making huge price uplifts or a 'boom' scenario unlikely.
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