Apartment and villa sales prices across Dubai decreased by an average 15 per cent and 13 per cent respectively, representing a significant slowdown in negative growth compared to the quarter-on-quarter decline from Q4 2008 to Q1 2009, the report said.

However, Palm Jumeirah, which along with the Dubai Marina forms the area known as 'New Dubai', has reported a surge in sales prices during the second half of the year, the report claims.

It was found that villa prices rose by 20 per cent and apartment prices have risen seven per cent. With more properties being handed over, owners are reluctant to sell at a reduced cost and are therefore leasing their units, Asteco claim.

This has led to apartment and villa rental rates on the Palm dropping by 12 per cent and 25 per cent respecively.

"The last few months have also seen distressed sellers being flushed out the market, with remaining owners now refusing to drop below a certain price level," said Vincent Easton, sales director at Engel and Volkers estate agency in Dubai.

"Increasing numbers of peo-ple are prepared to commute to Abu Dhabi from Jumeirah Lake Towers and Discovery Gardens," Easton told 7DAYS.

Andrew Chambers, Asteco's managing director, said the "demand has mostly been for one- and two-bedroom apart-ments and for three- and four-bedroom townhouses" in the 'New Dubai' areas.

Source: 7 Days