Dubailand may well become the next affordable housing destination in Dubai, thanks to larger spaces being offered at reasonable rents.
With one-fourth of the total new supply pipeline in the emirate being in Dubailand and an expected addition of 4,000 to 6,000 residential units coming online next year, rents are likely to decline by an average of 20 to 25 per cent over the next three to four years, says an expert.
Better Homes, a real estate consultancy, states that a studio apartment in Dubailand, on average, is being leased for between Dh22,000 and Dh35,000, a one-bed for between Dh35,000 and Dh55000, a two-bed goes for between Dh45,000 and Dh80,000 and a three-bed for between Dh90000 and Dh110,000 per annum.
Comparatively, a studio and one-bedroom apartment in Discovery Gardens is available in the range of Dh27,000 to Dh32,000, and Dh35,000 to Dh40,000 per year, respectively.
While in International City, a studio and one bed unit is rented for as low as Dh18,000 and Dh28,000 per year.
Landmark Advisory, a real estate consultancy, figures reveal a two-bedroom apartment in Motor City is being rented for Dh60,000 to 90,000 per annum while Layan two-beds lease for Dh55,000 to 60,000 per annum.
In comparison, a two-bedroom apartment in Discovery Gardens goes for Dh55,000 to 80,000 per annum, Jumeirah Lakes Towers (JLT) for Dh65,000 to 100,000 per annum and Dubai Marina for Dh65,000 to Dh140,000 per annum.
Darius Gamba, Senior Sales & Leasing Consultant, Green Community Office, Better Homes, says: “Tenants indeed are moving into these areas despite the infrastructure, transportation and community centres not being ready. The reason being: the units are spacious, quality construction and offer good value for money.”
Apartments in Motorcity, Sports City, International Media Production Zone and Green Community areas have also done relatively well with high occupancy, in comparison with JLT, Dubai Marina, and Jumeriah Village triangle, he adds.
Jesse Downs, Director of Research & Advisory, Landmark Advisory, says occupancy trends depend not only on the supply/demand dynamics and infrastructure of the master development, but, more importantly, on the quality of the infrastructure within the individual communities.
“Layan, previously known as Al Waha Villas, has successfully attracted demand because the villas and apartments are very affordable and the infrastructure within the community is nearly completed. In terms of demand dynamics, the villas there, for example, are relatively compact and suitable for small to medium size families looking for value in affordable communities. This has attracted relocation from within Dubai and also from other emirates such as Sharjah.”
Downs, however, believes rents will continue to decline in Dubailand due to the supply and demand fundamentals.
“Consider Dubai's total supply pipeline over the next four to five years, approximately one-fourth of the total supply pipeline is in Dubailand. We estimate a further 20 to 25 per cent decline in Dubailand average rents over the next three to four years.”
Landmark says there were approximately 4,000 residential units completed in the past year and expectations of another 4,000-6,000 units completed in 2011.
“Of course, this depends on the pace of construction, especially of some of the larger projects, over the next 12 months.”
Gamba says: “Of the recent past, we have not seen any decline or drop in rental prices. Should there be another drop in rents, we would anticipate probably another 10 per cent. But I would say lately there has been a lot of positive activity and chances are minimal for another decline at this stage.