Villas in Dubai are garnering an increased demand from potential tenants as rentals become economical.
"Villa rentals are looking very attractive at the moment. With a further supply of villas to enter Dubai, rentals are expected to decline although at a slow pace," said Mohanad Alwadiya, Managing Director, Harbor Real Estate.
According to Harbor Real Estate, an estimated 3,500 to 4,000 villas are likely to enter Dubai by the end of the year.
"This could trigger a 10 per cent further decline in villa rents. However, villas are strong assets for Dubai and demand for villas is always likely to be higher than apartments," he said."If there is any correction in rental rates for villas it is only because it is a natural market situation."
Kosta Giannopoulos, Manager-Residential Sales & Leasing, Better Homes, said: "It is difficult to quantify how much further villa rentals will decline but due to the increase in supply due to the handover of more projects such as Shorooq, Layan, Jumeirah Village, The Villa, Cedre Villas, etc and the stagnation of demand, we would expect continued downward pressure on rents."
Meanwhile, some new villa rental offerings in Sharjah have been priced very reasonable, thereby garnering a lot of interest from potential tenants, Emirates Business can reveal.
A new four-bedroom 'Al Riffa villas' in Sharjah is currently 'asking' a rent in the range of Dh100,000 per annum to Dh105,000 per annum, the developer of the project said.
ABTEC Properties, a member of the Bukhatir Group and developer of these villa properties, told this newspaper that a total of such 22 completed villas have been put up for rent in Sharjah.
"Nine families have already moved into the villas with five of these families being nationals from Sharjah itself. Demand has been high for these villas with daily enquiries on these properties," said Mohammed Qureshi, Head of Leasing, ABTEC Properties.
Giannopoulos said: "In Dubai's Mirdiff area, a four-bedroom villa with an area of 3,000 square feet space is currently going for a rent of around Dh120,000 per annum. Other attractive four-bedroom rentals in Dubai are Dh136,000 per annum for a 4,101 square feet space in Dubailand and Dh150,000 per annum for a 5,600 square feet area in Umm Suqeim."
Alwadiya said: "As more villa projects are being handed over in Dubai, it is expected for prices to continue to decline at a slow pace. A good example is the decline in prices that was recorded within Mirdiff villas (15 per cent to 20 per cent) due mainly to the handover of the Shorooq villas."
"Due to the limited number of villas, compared to apartments and the high demand for villas, mainly because of the unique lifestyle it offers, we have witnessed a slower decline in rental prices across the different villa zones in Dubai. Needless to say, villa communities that are completed and offer excellent facilities and amenities will not witness the same level of decline as other projects that are still under development," said Alwadiya.
According to Qureshi, the rental price for the four-bedroom villas in Sharjah had been derived after reassessing the rental values on these villas three times. "Right now, we are only sticking to these rental prices between Dh105,000 per annum and Dh100,000 per annum for the four-bedroom properties."
He said these villas will be maintained by the developer itself and the tenants will only have to pay the electricity and water bills.
Lease-terms of the rental contract is yearly with rents payable in four cheques.
Qureshi added that he has been given a total one-month deadline to lease the villas out.
"We are receiving a lot of enquiries from Dubai as well. The building will be fully maintained by ABTEC Properties and only electricity and water bills will be payable by the tenants."
According to ABTEC, all of the properties are four-bedroom villas with construction of the villas already started in the beginning of 2008. "These villas are only available for rental purposes."
Located near the beach side of Sharjah, these properties come with built-in wardrobes and separate maid-room area. "These villas are in the fifth row from the beach. Facilities such as a mosque, supermarket, laundry are all close to this area," said Qureshi.
According to Qureshi, the overall rentals have stabilised in Sharjah especially in areas such as Buhaira Corniche. "For a three-bedroom apartment, we are asking rentals in the range of Dh90,000 per annum to Dh95,000 per annum in Buhaira Corniche. In 2008, the rentals were around Dh115,000 per annum for the same property."
Meanwhile, villa rentals for two-bedroom and three-bedroom villas are also looking economical. Salwan's Layan villas in Dubailand are currently renting for Dh64,000 per annum for a two-bedroom property, Dh126,000 per annum for a three-bedroom villa and Dh153,000 per annum for a four-bedroom villa. These Mediterranean styled villas are located in the heart of Dubailand.
Alwadiya added that in Mirdiff, rentals for four-bedrooms range between Dh115,000 per annum and Dh180,000 per annum, while five-bedrooms range between Dh130,000 per annum and Dh210,000 per annum.
"In Al Warqaa, villa rentals are in the range of Dh120,000 per annum to Dh150,000 per annum for a two-bedroom villa, Dh140,000 to Dh180,000 per annum for a three-bedroom villa rental. However, in Springs three-bedroom rentals are ranging between Dh110,000 per annum and Dh175,000 per annum," he said.
According to Better Homes' Giannopoulos, rentals for a two-bedroom villa in Mirdiff with an area of 1,100 square feet space is currently going for Dh50,000 per annum while a two-bedroom villa with an area of 1,795 square feet space is going for Dh64,000 per annum.
"A three-bedroom villa in Mirdiff area with 1,590 square feet space is currently going for a rental of Dh80,000 per annum," he said.