Dubai prices on the up?

The prices of some properties in the most desirable areas of Dubai are starting to creep up, agents are reporting but developments are still being delayed because of the economic crisis...

While real estate agents are always keen to project the positive side of the industry the current round of optimism does seem to be based on reality rather than mere boasting.

Villas in developments in certain locations, with high build quality and facilities are experiencing price increases. These include Jumeirah Islands and the Green Community.

'It seems that the worst may well be over for Dubai property prices. While many experts predicted prices to continue falling throughout the remainder of 2009, several communities have actually increased transaction prices in May and June from a month earlier,' said Bernard Aoun, sales manager, Better Homes.

In April, two bedroom villas in The Springs were selling for £165,000, but are now going for £198,000. Transaction prices show apartment prices have also increased. In April, the average sale price was £589,700. This increased in May to £705,000.

'Prices are stabilising and in some cases increasing specifically for quality units in desirable locations. People continue to relocate within Dubai to get more value for their dirham and end-users are becoming increasingly sophisticated in their preferences. Location, views, amenities and infrastructure determine prices,' said Jesse Downs, Director of research and advisory services at Landmark Advisory.

But confidence is not returning to the development side of the property market with more projects being cancelled. Deyaar has formally cancelled its Enclave project after making a full refund to all investors.

'Although the project was good, it was launched at a very inopportune time. As a developer we had to be fair and so we returned 100 per cent of our investors' money. We will be happy to review the decision if the market comes back,' said CEO Markus Giebel.

The company has put a project in Saudi Arabia on hold.

Nakheel, the real estate development arm of Dubai World, has stopped allowing mobilisation on concept design after a number of third-party developers have absconded.

Source: www.propertywire.com