Subtle shifts in rental trends

Experts note that while they have noticed the residential market starting to stabilise, the commercial sector continues to see an ever-increasing demand for new options. After ten quarters of constant positive growth, residential rents suffered a marginal dip during the third quarter this year, falling by around 1%. The dip has been attributed to an increase in new residential stock combined with weaker demand during the traditionally slow festive and holiday period, Gulf News reported.
Mat Green, head of research and consultancy, CBRE Middle East says: "The slowdown reflects a general movement towards stabilisation in the market, along with the slowing of growth in sales values and lower transaction volumes. We expect this trend to continue into the final quarter. However, as was the case with Q3, the market will remain fragmented with pockets of both growth and decline evident within certain sub-markets and developments. Given the continued flight to affordability, we may expect to see some secondary locations outperform prime areas in the short term."
According to him, while stability can be seen in the residential market, the office market continues to experience rising demand with new requirements reflecting the improving state of the sector and the positive economic outlook.
"Whilst a number of major office developments, such as DTCD Phase 1, are under construction, the supply of good quality, single-owned properties is likely to remain constrained in the short-term, much to the frustration of a number of major corporate occupiers. This is not the case for strata accommodations, with a large influx of new buildings expected in the coming years, particularly in areas such as Business Bay."

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