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29 March 2024

Rents fall in prime Dubai areas: JBR down 5%, Downtown 3%

Published
By Parag Deulgaonkar

Rents in Dubai’s prime residential communities are falling.

In Jumeirah Beach Residence (JBR), frequent traffic congestion has dragged down lease rates by up to five per cent in second quarter compared to first quarter 2014, according to a new report.

“JBR has seen rents eroded in the last three months by up to five per cent with some residents choosing to relocate due to traffic congestion,” MPM Properties, the real estate consultancy arm of Abu Dhabi Islamic Bank (ADIB), said in a new report.

Ongoing construction work in JBR has dampened the beachfront master community’s popularity among tenants and buyers since early 2013.

“Major road construction work has resulted to traffic buildup, as well as the loss of beach access and views of the sea for residents – two of JBR’s unique selling points. Because of these, it has been rather difficult to entice potential tenants to look into renting a property in the area,” Renan Bourdeau, Managing Director, propertyfinder.ae, had said last year.

Meanwhile, the Roads and Transport Authority (RTA) confirmed on Monday that the Al Sufuoh road diversions would be lifted by next week.

In Downtown Dubai, MPM said rents had declined by three per cent following a sustained period of rising rents that resulted from the Expo 2020 announcement.

In the villa communities, Springs and Meadows, along with premium villas on Palm Jumeirah, have seen a slight correction in rental prices, ranging between three and four per cent.

DIFC, Al Furjan up

Apartments in Dubai International Financial Centre (DIFC) showed an upward movement of two per cent over the last quarter due a lack of residential stock. Jumeirah Village and Al Furjan also saw rents rise by five per cent and two per cent, respectively, over the last quarter driven by relocation of tenants from prime areas.

Cluttons, a real estate consultancy, said on Monday the rental value growth rate has slowed “significantly” in the upper end of the market.

Rentals grew at a slower pace of 1.4 per cent in the second quarter, as against 1.5 per cent registered in the first quarter 2014. Overall, rent increase remained under 3 per cent in the first six months of the year .