Latest Rera index reveals where Dubai villa rents are dropping

A comparison of the final update of Dubai’s official rent index reveals a mixed bag for villa communities with Palm Jumeirah and Springs witnessing decline, but the Al Furjan community showing an increase.

The average rent for five-bedroom villas on the Palm Jumeirah are down 23 per cent, with the average rate being Dh575,000 per annum (pa), as against the average rent of Dh750,000 pa in second quarter.

Four-bed villas are down five per cent with current rent at Dh475,000 pa, but three-beds rose to Dh370,000 pa compared to Dh310,000 pa.

The comparison is based on the average of the lower and the upper band of Real Estate Regulatory Agency’s (Rera) updated index against Asteco’s second quarter rental data.

The index is updated every four months - thrice a year.

In the Springs community, rents for two-bed villas dropped 15 per cent to Dh127,500 pa compared to Dh150,000 pa, while three-beds were down 25 per cent to Dh150,000 pa, as against Dh200,000 pa.

In Meadows, three-bed villas saw a rental decline of four per cent to Dh235,000 pa, compared to Dh245,000 pa, while four and five-bed villas rose marginally by 3.77 per cent and 4.8 per cent to Dh275,000 pa and Dh325,000 pa, respectively.

Rents of three-bed villas in Al Furjan dropped 8 per cent to Dh170,000 pa, while four and five-bed units increased by 7.3 per cent and 20 per cent to Dh220,000 and Dh300,000 pa, respectively.

The Arabian Ranches community saw rents for three-bed units decline by 4.34 per cent with average rents at Dh220,000 pa.

Four and five-bed units, however, rose by 2.4 per cent and two per cent to Dh320,000 pa and Dh375,000 pa, respectively.

Last week, Phidar Advisory said that residential rents in Dubai were slowing as the preliminary data analysed by them for the first half of Q3 2014 showed average lease rates falling 2.9 per cent for apartments and 5.6 per cent for single family home (villas).

“Although the market is technically undersupplied, rent inflation has slowed. This is likely due to ambitious expectations in H1-2014 that pushed up asking rents beyond affordability constraints.

“Housing demand is relatively elastic, but alternatives, like sharing and relocation to other emirates, exist and form an - albeit pliable - ceiling," the property consultancy said.

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