Rents of one-bed apartments in Bur Dubai have risen by 70 per cent between 2011 and 2015, while rentals in Deira jumped by 86 per cent during the same period, reveals data released by Asteco, a real estate consultancy.
Average rentals in the above two communities stood at Dh73,000 per annum (pa) and Dh65,000 pa in 2015. In Bur Dubai, rents touched the lowest in 2011 when average rent for one-bed stood at Dh43,000 pa. Similarly, the lowest in Deira was way back in 2012, with average lease rates at Dh35,000 pa.
The highest rentals for the areas were in 2008, with the cost of renting apartment in Bur Dubai and Deira at Dh105,000 pa and Dh88,000 pa, respectively. In 2009, rentals fell by 59 per cent and 45 per cent, respectively, with average rates being Dh43,000 pa and Dh48,000 pa, the consultancy said.
Last month, Emirates 24/7 reported that landlords in Bur Dubai, Karama and Deira areas were offering freebies such as zero commission, multiple cheque payments and sharing of apartments.
Asteco expects residential rents to fall in Dubai in 2016 and 2017 if “all housing units are delivered on time.”
“Rental performance in 2016 will be highly dependent on the timely delivery of supply. Assuming the anticipated supply is handed over on time, rental rates are likely to come under pressure over the course of not only 2016, but also 2017 onwards,” it said.
A total of 13,500 apartments and 800 villas were delivered last year, another 22,000 apartments and 7,700 villas are expected to be delivered in 2016.
Though JLL, a real estate consultancy, also expects residential rentals softening in the short term, it believes rentals are likely to increase again, perhaps as soon as 2017.