Tenants in Dubai are not likely to see a notable decline in housing rents this year despite the expected delivery of thousands of new flats and villas, a property analyst told Gulf News.
Rami Abi Faraj, head of residential sales and leasing for Better Homes Real Estate, said the 25,000 new units that are scheduled to be turned over this year might not be enough to bring the prices down because the demand for accommodation, owing to Dubai’s growing population, continues to increase.
“It’s very unlikely [that] there will be any significant rent reduction this year because we have continued high demand for most areas. There may be 25,000 units coming to the market but I think the key question is how much demand will grow along with that supply,” Faraj pointed out.
Property analysts had earlier predicted that residents in Dubai will spend less on rent this year because thousands of new flats and villas will add to the supply and drive prices down.
“If Dubai’s population is about three million and the population is growing by three to four per cent per year, then that’s roughly another 105,000 people to house. Assuming three people per property, that’s another 35,000 homes needed by the end of this year to meet demand. In which case 25,000 is actually not enough,” said Faraj.
“But the equation is obviously more complex than that, so frankly, it’s very hard to tell but our view is that rents will generally remain stable other than in a few years that receive a lot of supply, in which case rents may fall a bit for six to eight months before picking up again.”