Asteco report predicts tenants to get the advantage in negotiating lower rents due to oversupply.
Due to a large number of residential projects planned for handover in Dubai in 2017, tenants will be able to get a discount on rentals, Asteco experts believe, according to recently submitted agency’s report on the emirate’s residential real estate market situation.
According to Asteco, we can expect Dubai housing stock to swell with another 31,000 apartments and 12,500 villas in such areas and residential communities like City Walk, Akoya by Damac (recently renamed for Dubai Hills), Dubai Wharf and Mira community. These units will complement those 8,750 apartments and 5,000 villas delivered in 2016.
“Tenants will be offered a significant choice of completed properties in 2017 in both established and new communities,” said John Stevens, managing director, Asteco.
“The additional supply will continue to put downward pressure on market rates, which will place the negotiating power firmly in the hands of tenants, despite a forecasted increase in population,” he added.
Thus, despite the increase in population, the decisive power in Dubai rental pricing may probably go to tenants. However, only a small percentage of units scheduled for delivery within a certain period of time actually enters the market.
Besides, at the backdrop of rentals going down in some communities, other popular areas continually showed steady growth in prices at the end of last year and at the beginning of current year.