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19 April 2024

Renting apartments in Dubai now cheaper, villas become costlier

By Parag Deulgaonkar

There is good news for renters and the real estate industry.

Residential rents are continuing to slide, with Reidin.com reporting a decline of 1.57 per cent alone in January 2016.

Apartment rentals were down 1.67 per cent month-on-month (m-o-m) with year-on-year (y-o-y) decline at 5.2 per cent.

Villa rents fell 0.98 per cent m-o-m and 5.9 per cent y-o-y.

Overall, the annual rental decline was at 5.3 per cent.
For the industry, property prices increased marginally by 0.09 per cent in January though the annual decline stood at 9.6 per cent.

Apartment prices dropped 0.19 per cent m-o-m and 9.7 per cent y-o-y, but villa prices jumped 1.23 per cent m-o-m, with the annual decline at 8.9 per cent.
In the past one week, developers such as Emaar Properties and Damac Properties have reported good response to their “off plan” projects.
Dubai Land Department Director-General Sultan Butti Bin Mejren told Emirates 24|7 earlier that the emirate had registered transactions worth Dh68.48 billion in the first 53 days of 2016, showing signs of 'thriving' property market.

It expects total transactions to touch Dh300 billion by year-end compared to Dh267 in 2015.
Read: Dubai property market ‘thriving’: Dh68 billion deals in 53 days

However, contrary to Reidin.com report, Core, the UAE associate of Savills, and other global/local consultancies predict further “softening” in the real estate market.

Core expects prices and rentals to soften over the next 12 months joining other such as JLL and Asteco who have given similar predictions.  

Another issue that will decide on the movement of the rental market is the number of new units to be delivered this year.

There is no clear data on it till now with various consultancies estimating anything between 8,ooo and 20,000 units.