Dubai rents fall: Greens, Marina, Springs, Ranches drop
Rents are falling in Dubai's prime areas as tenant demand diverts to other not-so-posh locations of the emirate.
Downtown Dubai, Jumeirah Beach Residence (JBR), Greens Community, Meadown, Springs and Arabian Ranches witnessed a decline in rental prices.
However, Dubai International Financial Centre (DIFC), Jumeirah Islands and Mirdif witnessed a rise in rental prices in the last quarter.
Rents in the Greens community, close to Sheikh Zayed Road, registered the maximum decline in the third quarter, falling 15 per cent compared to the second quarter 2014, a new report reveals.
Lease rates for studio units now range between Dh60,000 and Dh65,000 per annum (pa), data released by MPM Properties, the real estate subsidiary of Abu Dhabi Islamic Bank (Adib), shows.
Rents for one-bed units range between Dh85,000 and Dh95,000 pa, while two-bed units are being leased for Dh120,000 to Dh145,000 pa.
The official rent index of Real Estate Regulatory Agency (Rera), the regulatory arm of the Dubai Land Department (DLD), however, puts rents for studio units at Dh55,000 to Dh65,000 pa; two-bed units at Dh75,000 to Dh85,000 pa and three-bed units at Dh110,000 to Dh130,000 pa.
Rents in Dubai Marina declined by 4 per cent with one- and two-bed apartments being leased for Dh90,000 to Dh130,000 pa and Dh135,000 and Dh175,000 pa, respectively.
Downtown Dubai saw rates fall by three per cent after seeing a sustained period of growth following the Expo 2020 announcement.
Lease rates start from Dh70,000 to Dh85,000 pa for a studio; Dh100,000 to Dh115,000 pa for a one-bed unit and Dh145,000 to Dh175,000 pa for a two-bed dwelling.
Jumeirah Beach Residence
JBR saw rents erode in the third quarter with some residents choosing to relocate due to traffic congestion, which resulted in average rents declining five per cent.
“Apartment rents have followed a similar pattern to sales values over the last quarter with contrasting performance across some of the major developments in the city, reflecting micro level influences,” MPM Properties said.
Dubai International Financial Centre
However, rents in DIFC showed a slight upward movement, rising two per cent over the last quarter due to lack of availability.
“High rents in prime areas have led to tenant demand being diverted to locations such as Jumeirah Village and Al Furjan with these communities seeing higher occupancy and upward pressure on rents,” MPM Properties observed.
In the villa segment, rentals in the Springs, Meadows and Arabian Ranches – each of the communities saw a decline of four per cent.
Rents for two and three-bed villas in the Springs currently range between Dh130,000 and Dh150,000 pa and Dh165,000 and Dh200,000 pa, respectively.
Lease rates for two-bed villas in Arabian Ranches ranges from Dh140,000 to Dh180,000 pa, while three-bed villas are available for Dh180,000 to Dh350,000 pa.
“Villa rents have followed the same trend as apartments with some popular communities with high occupancy levels showing a continuation of rental growth witnessed over previous quarters, whereas others have seen landlords having to drop asking rents following long periods of vacancy,” the report stated.
Jumeirah Islands and Mirdif, however, witnessed rents increasing by five per cent and two per cent, respectively, over the last quarter.
MBM Properties estimates over 5,000 units were delivered in market in the third quarter with new additions coming from Capital Bay and Cosmopolitan in Downtown Dubai, Canal Residence West in Sports City, West Avenue Tower in Dubai Marina, and Burj Daman in DIFC.
“Based on projects already delivered this year and the estimated completion dates of under- construction projects we estimate a total of 27,000 residential units will have been added to the market during 2014, increasing the total supply to approximately 477,000.
“We do expect however that some of the under construction projects will have completions slip into 2015. An estimated further 22,000 units are scheduled to be delivered during 2015,” the consultancy stated.
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