In fact, they are on the incline with average lease rates for two- and three-bedroom apartments having shot up by more than 20 per cent in the first quarter compared to fourth quarter 2011.

According to data from Dubai-based Harbor Real Estate, two-bedroom apartments were being leased for Dh100,000 to Dh120,000 per annum in the first quarter compared to Dh80,000 to Dh110,000 in September 2011.

Three-bedroom units are available in the range of Dh130,000 to Dh150,000 pa (Dh105,000 to Dh150,000), while one-bed apartments were rented for Dh75,000 to Dh90,000 (Dh65,000 to Dh80,000).

Information provided by PropSquare Real Estate reveals rents for two-bed units to be in the Dh100,000 to Dh120,000 pa range as against Dh80,000 to Dh90,000 pa in Q4, 2011, while rates for three-beds ranged between Dh135,000 and Dh145,000 pa (Dh110,000 to Dh120,000 pa).

Rents for one-bed units stood at Dh70,000 to Dh80,000 pa compared to Dh60,000 to Dh70,000 pa.

According to Asteco’s first quarter report, rents in JBR rose four per cent quarter-on-quarter with one, two and three beds available for Dh70,000, Dh90,000 and Dh115,000 pa, respectively.

JBR is among the prime freehold localities in Dubai. It faces 1.7 kilometres of beach that features luxury hotels, retail outlets and restaurants and houses 36 residential towers.

Global Investment House (GIH), in a new GCC real estate sector report, said rents have started to increase in selective areas of Dubai after the pace of rental income slowed down significantly in 2011.

“The pace of decline in Dubai rents slowed down significantly in 2011 and is starting to shift gradually into selective increases in areas of higher quality and demand,” GIH said.

In Dubai, GIH estimates the market is currently 20 per cent oversupplied that means 67,000 units are currently vacant.

According to the prospectus, Dubai Land Department says that 291 projects are on hold, but that each of them is likely to qualify for either the Tayseer or the Tanmia initiatives that will provide financial and other assistance to such projects and their investors.

The total number of companies now participating in the programme has reached 12.

Wasl Asset Management Group, a subsidiary of Dubai Real Estate Corporation, was the first to join the initiative in September last year.

ICD-Brookfield, a joint venture between Investment Corporation of Dubai and Canada’s Brookfield Asset Management, was formed in October 2011.

The fund’s investment strategy includes targeting opportunities currently available in Dubai’s real estate sector with focus on a wide class of assets in both freehold and non-freehold areas.

Majida Ali Rashid, Manager-Real Estate Investment Management & Promotion Center, DLD, said: “The agreement to join Tanmia will lead to further quality developments in the real estate market, especially with the ICD-Brookfield’s aim to buy existing real estate projects to distribute to beneficiaries of its programmes.”

She stated that the real estate market has become a perfect model in terms of turning challenges into opportunities.

The Tanmia initiative, launched in September 2011, aims at revitalising the real estate market by focusing on the incomplete projects under all categories.

The department has appointed a number of audit firms to undertake technical and financial audits on number of stalled projects.

“Increasing investors’ confidence in the market is our top priority, and we are sure that our initiatives will play a major role in raising investors’ confidence,” Majida asserted.

Khaled Al Bakhit, Chairman of ICD-Brookfield, said: “We believe that this initiative will promote efficient collaboration between the department and interested investors in Dubai real estate, such as ourselves as participants in the programme, and will ultimately enhance real estate investment decision making.”

In October 2011, Sultan bin Butti bin Mijren, DLD Director-General, told this website that the Tanmia will cover 100 projects in 2012 and the initiative will be continued for the next three to four years.

We reported earlier that Santevill, a Dh400 million 25-storey tower in Business Bay, was to be the first recipient of funding under Tanmia.

In July 2010, the land department had launched Tayseer initiative, which aimed at facilitating financing for purchasers in certain pre-qualified projects.

To date, only two projects have been financed under this scheme.

Earlier this month, we reported that the department would be launching Tanweer programme designed to enhance investors’ confidence and act as a reference guide aimed at setting the frameworks and general principles of the rights and duties of investors.

“Prices have appreciated by 15 per cent in the Ranches. A five-bedroom villa that was selling at Dh4 million is now going for Dh4.5-4.7 million.

Arabian Ranches fared much better than the average rate, with an appreciation of 7 per cent. “The rise is predominantly driven by increased acquisitions from owner-occupiers in areas such as Arabian Ranches,” read the Q1 2012 report.

The price of the villa can go up with the location.

The villas with a pool and park or lake view can fetch a premium.

“Real Estate is all about location. Within a community, properties with a pool/park or lake facing commands at least 5-10 per cent more than the same unit without the key view or location. Properties that lie near the Emirates Road have trouble selling due to the location,” .

According to classifieds, a two-bedroom villa of approximate size of 1889 sq/ft, is priced at Dh1.65million, making it Dh873 sq/ft.

A similar villa was going for approximately Dh1.4million in Q2 2011 and the year before a similar unit was available only for a little over Dh1million.

“We’ve been thinking of buying a small villa in the Ranches for our own use. I guess we’ve taken a long time to decide and will have to pay more if we go for a place here. The agents tell me that prices will appreciate more this year and will add up if I delay my decision,” said Anjali Dube, an Indian expat in Dubai.

Arabian Ranches prices vary owing to the villa type and size.

Townhouses offer the cheapest option here where as the highest range is occupied by bespoke mansion like villas that sit on large plots.

During the property boom time, Dubai saw 1,500 transactions, worth Dh18.70 billion, in Q1 2008. In Q1 2009, total registration declined three times to 343 with the value falling to Dh4.25 billion. In Q1 2010, sales transactions rose to 505, valued at Dh3.619 billion.

International and local real estate consultancies have said that property prices are stablising in Dubai with the new Knight Frank and Citi Private Bank Wealth Report putting Dubai as the 13th most important city in the world for the ultra-wealthy, and eighth in terms of growing in importance to the high net worth individuals (HNWIs).

“Despite its struggles in recent years, Dubai was voted the 13th most important city in the world,” the report, said.

Earlier last month, Knight Frank said that real estate in Dubai had not only stabilised, but prices went up 2.3 per cent on average in the last quarter of 2011.

Asteco, Dubai-based real estate consultancy, said recently that property prices have stablised with certain villa communities such as Palm Jumeirah, Arabian Ranches and Springs already witnessing price hikes of up to nine per cent.

The population of Dubai reached 2m at the tail end of last year, according to data released by the Gulf emirate’s government.

According to the Dubai Statistics Centre, in December 2011 the number of people living in Dubai hit 2.003m.

The figures also showed that male inhabitants in Dubai are heavily outnumbering females, with men accounting for about 76 percent of the total number of people in the emirate.

The Dubai Statistics Centre said that the population was skewed towards men because expatriate male workers were not always joined by their families while living there.

However, there is a general consensus that the large influx of new supply slated to hit the market will serve as a major roadblock to the sector's recovery in the short term. At present, there are approximately 336,000 residential units in Dubai, with around 23,000 additional units set to enter the market in 2012, according to Jones Lang Lasalle.

Cluttons said the Dubai market was "still plagued by oversupply" but was seeing "selective stabilisation", with growing demand for homes in some parts of the city.

"In some premium locations with only a fixed number of properties on the market, Cluttons is already seeing prices increase as a result of a strong interest in potential buyers," the real estate firm said.

Investors focus on premium property:

Tom Bunker, Investment Sales Consultant at Better Homes, said 'a lot' of the activity he is seeing is in property that her refers to as the 'good stuff', by which he means villas and apartments that are well managed, in good locations, and built by reputable developers.

He says there is high demand for the 'good stuff', with investors now buying up to 20 units at a time. "I can see the good stuff appreciating quite steadily over the next year or so because more and more investors are coming into town and they are looking for exactly that type of property, and it's going to start disappearing because there is a limited amount of it," he said.

Bunker says there is a big difference between the property that is set be handed over and the 'good stuff' with regard to build quality and location. "I don't really care about what else is coming online down the road, because I don't see anything that compares to the good stuff right now," he said. "It's more of the regular stuff, and it shouldn't have too much influence on the appreciation of the good stuff."

"And the people who are holding the mediocre or poor properties, well all bets are off on that because it is going to be a while before we see any real activity in that product," Bunker added.

While agreeing that the influx of new supply will have no impact on the price of upper-tier property, Vineet Kumar, Head of Business Development at Asteco Property Management, goes a step further by contending that the concerns about oversupply in the Dubai market might be overstated.

"I think that concerns are over blown because as we know inventory is handed over in stages and not all at once and of course some projects have been delayed, making it even more difficult to estimate exactly when certain building will come to market," Kumar said.

"In addition there is a secondary and in some cases a very time consuming process of preparing a building for its residents. Health and safety issues, lifts, swimming pools, parking, utility connections, ID cards and even duplicate keys need to be organised before allowing owners to take possession of their properties."

"Evaluating both of these points, it is almost impossible to estimate accurately when, on a Dubai-wide basis, supply will be coming to the market," he added.

While acknowledging that the effect that the new projects will have on the market cannot be ignored, Kumar said eventually it is the market that will decide what values they achieve. "And as the market matures, location and quality will be always be in demand," he said.

Although the real estate consultancy has witnessed a decline in enquiries from Europeans and Americans this year, it is the Saudis, Qataris and Omanis who are offsetting that decline.

“We have seen a 20 per cent increase in enquiries from GCC nationals.

The main buyers appear to be topped by Qataris and Saudis followed by Omanis,” Mario Volpi, Head of Sales & Leasing for Cluttons Dubai told 'Emirates24|7'.

He says that GCC nationals tend to buy apartments if they are investing whereas they look to purchase a holiday home tend to be looking at villas.

“The locations of interest are a good mix of freehold and non-freehold areas.”

Asked why investors from Europe and the US have slowed down their investment in Dubai realty market, Volpi said: “We believe that investors from Europe and the US are preferring to take a more cautious approach, as their finances are further stretched by their local economies.”

According to figures released by Dubai Land Department, Indians and Britons invested around Dh6.9 billion and Dh4.79 billon, respectively, in 2011. They were followed by Pakistanis (Dh2.44bn), Iranians (Dh3.8bn), Russians (Dh2.03bn), Americans (Dh1.19bn) and Saudis (Dh1.44bn).

In addition, Cluttons also believes that Dubai’s residential real estate market is now more secure and transparent, driving investment back into the city.

“Speculation has disappeared and distressed sellers are very few.

Proactive sellers are now looking to trade up as property prices have fallen, and in some cases as much as 60 per cent. As a result, more serious buyers are once again searching for those exemplary properties.”

However, the property market is still plagued by oversupply and is still fragmented with selective stabilisation being witnessed.

“Dubai is still a buyer’s market, since the global recession, however now with the return of accessible financing, sellers are now enjoying a high number of buyers in the market, therefore experiencing quicker sales,” he added.

Earlier this month, Marwan bin Ghalitha, Chief Executive of Real Estate Regulatory Authority, said up to 16,000 new units will be released this year.

"Another 15,000 to 16,000 (units) are coming in 2012. Most of this supply will be from master developers,” he said at a recent conference.

London-based Dynamic Group is, however, optimistic that the Dubai project will commence as and when the market conditions allow it.

“We will announce the start of the construction in London in due time. Most probably within the year,” the developer said in an emailed statement.

Whilst in an email sent to investors worldwide, it said: “We are now close to starting construction on the first building in motion in London, which will become a world landmark.

“This building will be a ‘Centre of Excellence’ and an icon of future lifestyles and sustainability.”

The company website lists the London Dynamic Project as of profound relevance to a city reclaiming its role of ‘Center of the World’.

“As the city prepares to host for the third time the Summer Olympics in 2012, it wishes to bring this icon of future life to London, receiving its own rotating tower to serve as the landmark for the event, and an inspiration for generations to come,” it adds

Asked about its Dubai plan, the company said: “As far as Dubai - we will love to know... and we hope as soon as the conditions will allow it.

In March 2011, Emirates 24|7 reported that the developers of Dubai's Dynamic Tower, where each of the 80 floors will be able to rotate independently, are keen to put the project back on track.

“The Dynamic Tower in Dubai is on hold due to the current situation. Of course, Dr David Fisher and our team would be delighted to have the tower in Dubai on track,” Simona Casati, Press Office & Communication Manager, Dynamic Architecture Group, had said

The latest market insight report from Kay and Co, a London-based property market research specialist, shows that Middle Eastern applicants are up 50 per cent compared to the same time last year, accounting for 30 per cent of all sales applicants in the first three months of 2011

The report adds that the number of buyers originating from the Middle East has significantly increased in the wake of the Egyptian crisis and the wider unrest in the region.
Buyers are predominantly interested in properties with asking prices of over £5 million (Dh29 million).