After gaining the title of the world’s tallest residential building, Dubai is now experiencing an increasing difference between real estate prices in prime locations and in less favored areas, according to a report that was published yesterday, May 10, 2011.
A research by United Arab Emirates real estate brokerage firms and consultancy provider Landmark Advisory showed that particularly in the residential sector, well-established communities and high-quality properties in good locations are performing better than their counterparts while medium quality apartments in weaker areas promise to flood online throughout this year.
With the results, higher quality buildings are close to undertaking price stability today while the existing and future supply of medium quality buildings will yet to realize stability in value.
The oversupply caused capital value declines which are hindering potential purchasers from taking on the market and while it now makes sense for companies to consider owner-occupation, liquidity constraints are preventing this being witnessed on a large scale, said Saeed Hashmi, head of valuation and advisory at Landmark.
In addition, due to the increase in demand for well-maintained villas, prices in established communities such as Downtown Dubai and the Lakes and Meadows have remained stable.
Landmark also saw an increase in sales activity in Jumeirah Lakes Towers and Dubai Marina which is probably because of the combination of relocation demand from other emirates and people looking to take advantage of lower prices.
The imbalance between supply and demand also forced down property values in tertiary areas such as International City and Discovery Gardens.