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25 June 2024

House rents in Dubai continue to rise

By Parag Deulgaonkar

Rents continue to soar in Dubai month after month since 2013.

Reidin.com data released on Thursday revealed that rents for residential properties rose by 2.12 per cent month-on-month (m-o-m) in January 2014 with rental prices increasing 20.32 per cent year-on-year (y-o-y).

Apartment rents jumped 2.35 per cent m-o-m and 22.56 per cent y-o-y, while villa rentals went up by 1.02 per cent m-o-m and 10.82 per cent y-o-y.

Though in its Q4 2013 report, Jones Lang LaSalle (JLL), a global property consultancy, had predicted that 28,000 new units will be released in 2014, it said in February that realistically it expected only 20,000 new units to enter the market this year.

Property prices, especially the apartment segment, remained on the growth trajectory. Property sales index increased by 2.55 per cent m-o-m, while prices soared 26.79 per cent y-o-y.

On the apartment front, prices went up by 3.33 per cent m-o-m and 29.70 per cent y-o-y. However, villa prices registered a decrease on a m-o-m basis in January. It fell by 0.40 per cent m-o-m, but still reflected an increase of 16.38 per cent y-o-y.

In February, Craig Plumb, Head of Research, JLL Mena, said: "There has been concern that Dubai will experience another bubble, but there are many differences this time around that makes for a ‘smarter’ market.

"Some of these differences are that investors are more cautious, regulations are better, developers are less reliant on pre-sales and significant levels of new supply. Though rise in residential property prices was ‘irrational’ in 2013, the rate of increase will slow-down this year. But there won't be any correction this year," he added.