Rents in Dubai remained stable in the first quarter of 2015 despite majority of tenants opting to renew leases rather than relocate, reveals a new property report.
“There was limited movement in the residential rental market with only minor adjustments in select areas, with demand centered on established communities and affordable products, augmented by the decision of many tenants to renew rather than relocate,” Asteco, a real estate consultancy, said in its first quarter 2015 report on the market.
Biggest decline - Deira
On the rental side, the biggest decline was registered in Deira, a leasehold community, which saw rates falling eight per cent quarter-on-quarter, with a studio now renting for Dh35,000 to Dh55,000 per annum (pa); one- bed Dh45,000 to Dh80,000 pa; two-bed Dh65,000 to Dh100,000 pa and three-bed Dh90,000 to Dh140,000 pa.
Among the freehold communities, International City was the cheapest, though rentals were up two per cent.
Studio units were leasing for Dh32,000 to Dh38,000 pa; one-bed Dh42,000 to Dh55,000 pa and two-bed Dh60,000 to Dh68,000 pa.
Dubai Marina saw rents falling by two per cent with studio rates ranging from Dh65,000 to Dh85,000 pa; one-bed Dh85,000 to Dh135,000 pa; two-bed Dh125,000 to Dh185,000 pa and three-bed Dh145,000 to Dh275,000 pa.
Jumeirah Lakes Towers (JLT) saw one per cent increase with studio units leasing from Dh60,000 to Dh80,000 pa; one-beds Dh80,000 to Dh100,000 pa; two- beds Dh115,000 to Dh150,000 pa and three-beds Dh145,000 to Dh190,000 pa.
Newer communities such as Jumeirah Village registered a four-per cent increase with leases starting from Dh45,000 to Dh60,000 pa for a studio; Dh60,000 to Dh75,000 pa for one-bed units; Dh90,000 to Dh115,000 pa for two-bed units and Dh125,000 to Dh150,000 pa for three-bedroom apartments.
Among the villa communities, Meadows saw a four-per cent rental decline.
Three-bed units were leased from Dh230,000 to Dh250,000 pa; four-bed for Dh250,000 to Dh300,000 pa and five-bed Dh260,000 to Dh290,000 pa.
Rentals in Springs dropped by three per cent with two- and three-bed units available for Dh120,000 to Dh140,000 pa and Dh165,000 to Dh210,000 pa, respectively.
A three per cent decline was seen in Arabian Ranches with two-bed villas leasing for Dh145,000 to Dh185,000 pa, three-bed from Dh170,000 to Dh250,000 pa and four-bed from Dh250,000 to Dh325,000 pa.
However, Palm Jumeirah saw rents increasing by five per cent with three-bed units renting from Dh330,000 to Dh380,000 pa, four-bed Dh380,000 to Dh650,000 and five-bed Dh440,000 to Dh1.1 million pa.
Willingness to reduce
In the first quarter 2015, the consultancy said it noted a willingness from sellers of premium properties to “reduce” their asking rates, but due to the limited demand for this segment transactions remained limited.
The report said the number of transactions for completed apartment properties were down by 12 per cent, whereas those for completed villas dropped by 35 per cent quarter-on-quarter.
In the apartment segment, Downtown Dubai and Dubai Marina were down five per cent each, while Discovery Gardens and International City saw decline of a two- and one-per cent, respectively.
Despite remaining popular in terms of the number of transactions, prices in Meadows and Springs dropped by nine per cent quarter-on-quarter, driven mostly by new supply in completed and off-plan projects.
Palm Jumeirah saw prices decline by five per cent due to fewer premium property buyers, while Al Furjan and Jumeirah Park fell seven per cent and five per cent, respectively, due to the large volume of properties currently for sale, the consultancy stated.