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Subtle changes in rental trends

28.09.2014
Subtle changes in rental trends
The emirate remains one of the most affordable metropolitan cities in the world despite the fact that rents skyrocketed over the past year. After ten quarters of constant positive growth, residential rents suffered a marginal dip during the third quarter this year, falling by around 1%. While this may not seem significant on its own, it has become apparent that there are changes taking place in the rental market with buyers becoming increasingly more price-aware.
The slow down in growth has been attributed to an increase in residential stock, something that is set to continue increasing as the emirate gears up for Expo 2020. In fact, around 19,000 new homes are scheduled to enter the market next year. Mid-tier developers are working on completing multiple projects simultaneously in locations such as Sports City and which could add to the residential stock in bulk by 2017 and thereafter. Newer clusters are also getting created, such as Silicon Park in Silicon Oasis.
Research shows that locations such as the International Media Production Zone, TECOM and Downtown Dubai may have seen a 3% trim in rental demands. Other clusters such as Jumeirah Lakes Towers and Dubailand Residences recorded dips of around 2%.
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."
With the market moving towards increased stability, it has begun to attract even more investor attention. The emirate remains one of the most affordable metropolitan cities in the world despite the fact that rents skyrocketed over the past year. Paul Preston, head of IP Global, Middle East, noted: "More and more people are starting to see property investment as one of the highest performing asset classes within their investment portfolios."
Latest Availability
RENT
125,000 / year
Ref.No: OF1209
Office
1,655 ft2
76 AED/ft2
RENT
58,500 / year
Ref.No: OF662
Office
1,300 ft2
45 AED/ft2
SALE
6,800,000
Ref.No: AP1113
3BR Apt
3,003 ft2
2,264 AED/ft2
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Lease process (Rent out)
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.

Required documents:

  • copy of the passport
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Ad placement

1 day

Ad placement:
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Up to 2 days

Signing of the lease agreement
Expenses of the seller:

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Lease process (Rent)
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.
Real estate search.

Up to 5 days

Real estate search.

Selection of optimal options.

Signing of the lease agreement

Up to 2 days

Signing of the lease agreement
Expenses of the lessee:

-5% agency commission of the annual contract price

Additional services:

None

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Contract of the tenant and agency.

1 hour

Contract of the tenant and agency.
Property Selection

~ 2 weeks secondary

~ 3 weeks new building

Property Selection

Selection of optimal options

Registration of the contract of purchase / sale

1 Week

Registration of the contract of purchase / sale
Customer charges:
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  • 4% - registration of the transaction at registration
Additional services:

Property management

Sales Process
Contract of the lessee and agency.

1 hour

Contract of the lessee and agency.

Required documents:

  • copy of the passport
  • copy of the certificate of ownership
Ad placement

1 day

Ad placement:
  • 20 real estate portals;
  • client base of the agency;
  • profile exhibitions, etc.
Signing of the lease agreement

Up to 2 days

Signing of the lease agreement
Expenses of the seller:

None

Additional services:

None

the management process
Contract of the owner and agency

1 hour

Contract of the owner and agency
Rendering of management services

1 year

Rendering of management services
Reporting

1 day

Reporting
Expenses of the owner:

5% of the annual rental price

Additional services:

None

Investment Process
Contract of the tenant and agency.

1 hour

Contract of the tenant and agency.
Selection of optimal investment options

From 3 days

Selection of optimal investment options
Registration of the contract of purchase / sale

1 Week

Registration of the contract of purchase / sale
Expenses of the investor:
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  • 0% when investing in a new building
  • 4% - registration
Additional services:

Property management