Dubai tenants can expect 'slight' fall in rents over next 3 months
Real estate agents in Dubai are expecting a ‘moderate’ decline in average rental prices in the third quarter 2015 though the period over the three months to June reported a ‘robust and accelerated upturn’ in rental demand, according to Emirates NBD Dubai Real Estate Tracker.
“More than half of the agents in the survey noted an upturn in apartment lettings against only 13 per cent that experienced a fall. Exactly 41 per cent signalled an upturn in villa lettings, while only 18 per cent suggested a reduction,” the survey, released on Thursday, found.
It added that demand for apartments continued to rise more quickly than for villas.
However, 58 per cent of the households, who have rent renewal coming up in the next three months, expect rise in their rentals with only 15 per cent foreseeing a reduction.
The survey, sponsored by Emirates NBD and produced by Markit, contains original data compiled from a representative panel of 70 real estate agents, alongside original survey data collected from 600 households living in Dubai.
On the property sales side, agents reported of “softer” overall conditions, with 52 per cent reporting a drop in average sale prices, while 23 per cent noted a rise in property values in the second quarter.
New buyer enquiries decreased during the period, driven in part by an expected slowdown ahead of Ramadan, with some agents even citing reduced risk appetite among investors and more subdued underlying international demand than earlier in 2015.
In June 2015, 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.
Household view, however, contrasted with the outlook among agents. Sixty-six per cent expect a rise in their property value over the next 12 months, compared with just 17 per cent presume a reduction.
“The underlying data suggests that the market is more evenly balanced than the headline indices suggest, and all indicators for the rental sector suggest that the population dynamics remain supportive of the real estate market in Dubai,” said Khatija Haque, Head of Mena Research, Emirates NBD.
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