Dubai residential rents cheaper, continue to decline in May
Residential rents in Dubai continued to fall, but the pace of decline slowed down in May 2015 compared with April 2015, according to Reidin.com report.
Rentals declined marginally by 0.37 per cent compared to 0.67 per cent in April 2015. On year-on-year (y-o-y) basis, rents rose one per cent, the company said.
Apartment rentals fell 0.44 per cent month-on-month (m-o-m), but rose 1.2 per cent y-o-y. Villa rents also came down by 0.44 per cent m-o-m, but remained unchanged y-o-y.
‘Emirates24|7’ reported earlier summer was the best time for renters to lease apartments in Dubai.
Read: Summer, Ramadan in Dubai: Best time to bargain, save on rent
In January 2015, JLL, a real estate consultancy, predicted residents could expect rental declines this year, with rent-free periods being offered to tenants as the emirate was expected to receive over 22,000 new residential units. Knight Frank, a UK-based consultancy, also opined residential rents were likely to fall by five per cent.
The sales price index declined by 1.29 per cent m-o-m, but the fall y-o-y stood at 5.7 per cent.
Apartment sales prices decreased by 1.19 per cent m-o-m and also fell 6.8 per cent y-o-y. Villa sales prices registered a fall of 1.72 per cent m-o-m and a y-o-y decline of 0.8 per cent.
Earlier this month, Standard & Poor’s (S&P), a global ratings agency, said property prices in Dubai’s residential housing market are expected to fall by 10 to 20 per cent this year.
“We generally believe our rated issuers could absorb a 10 to 20 per cent drop in residential sales prices in Dubai because they are better armed than they were in 2009 in terms of revenue predictability and mix, product mix, and solid capital balance sheets,” it said.
Moody’s Investors Service, a global ratings agency, has said prices will fall by 10 per cent this year but believes government spending on infrastructure and encouraging more foreign investments in various sectors will support the real estate market over the next five years.
HSBC Global Research has said Dubai may see supply of 90,000 new units by 2018, but the market will absorb – fairly easily — the new supply even if the population grows less than five per cent per year.
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