Will Dubai villa rents rise? What Rera index says
The first Dubai rent index update of 2015 saw apartment rents going up by 6 to 25 per cent across various freehold communities, but that’s not the case with the villa segment.
Lease rates have remained stable across freehold villa communities, a comparison by ‘Emirates24|7’ of 2015’s first rent index update against 2014’s last index figures reveals.
Rents in the Springs community has seen no rental increase with rents for two-, three- and four-bed dwellings remaining at Dh120,000 to Dh135,000 per annum (pa); Dh180,000 to Dh200,000 and Dh200,000 to Dh250,000 pa, respectively.
The index reveals no rental rise in the Meadows as well. Three-bedroom villas still lease between Dh220,000 and Dh250,000 pa, while four-bed units are renting for Dh250,000 to Dh300,000 pa.
Rents for three- and four-bed villas in Arabian Ranches stay at Dh200,000 to Dh240,000 pa and Dh290,000 to Dh300,000 pa, respectively. However, the upper range for two bed-villas is up by 3.12 per cent, with leases starting between Dh145,000 and Dh165,000 pa.
Similarly, rents in the upper range of the index for three-bed units in Palm Jumeirah rose 2.5 per cent to Dh350,000 to Dh400,000 pa while four-bed villas remain same compared to the last rent index of 2014 at between Dh450,000 and Dh500,000 pa.
Rents for Jumeirah Village Triangle saw no increase with leases starting at Dh140,00 to Dh160,000 pa for two-bed units and Dh160,000 to Dh180,000 pa for three-bed units.
In December 2014, CBRE, a global real estate consultancy, said the new supply of 20,000 residential units in 2015 could have a deflationary impact on sales and rental rates.
In the apartment segment, the highest increase, as reported by this website, was in Remraam, where two-bed units have risen by 13.13 per cent to 25 per cent.
Read: First rental index update of 2015: Dubai rents up 6-25%
Rent decree in Dubai
Dubai government has issued Decree No. 43 of 2013 concerning the percentages of maximum property rent increase that are to be allowed upon renewal of tenancy contracts. The rent increase slabs are as follows:
# No rent increase if the rent of the property unit is less than 10 per cent of the average rent of a similar property in the same residential area.
# If the rent value is between 11 and 20 per cent less than the average rent of a similar property, the maximum rent increase shall be equal to 5 per cent of the rent value.
# If the rental value of a unit is between 21 and 30 per cent less than the average rent of a similar unit, the maximum rent increase shall be equal to 10 per cent of the rental value.
# If the rental value of a property is between 31 and 40 per cent less than the average rental of a similar property, the maximum rent increase shall be equal to 15 per cent of the rental value.
# If the rental value of a property unit is less than 40 per cent or more of the average rent of a similar unit, the maximum rent increase applicable is of 20 per cent.
The average similar rental value of the property will be determined by the Real Estate Regulatory Agency's rent index, the decree states.
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