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Dubai rents: prices and industry forecasts

05.11.2019
The most tenant-friendly market in the UAE, Dubai rental market in 2019 made it possible for tenants to sign the best ever rental agreements.

Dubai average rental rates continued to decline in the third quarter, although some brokers felt that the housing market had finally reached the bottom of its parabolic development cycle as the decline began to slow.

Chestertons announced a decrease in the average rent quarter-on-quarter by only 1% in Dubai as a whole, both in apartments and in villas rental segments. Experts from the JLL agree with these data, while Asteco reported a decrease of 3% and 2%, respectively, for the indicated real estate categories.

Cavendish Maxwell's annual data showed an annual decline of 15% for apartments and 12% for villas and town houses, and 3.6% for the third quarter for all types of real estate units.

Moreover, many surveyed tenants said they pay less now for the same accomodation than they did a year ago. A survey conducted by The National newspaper in September showed that 57 per cent of respondents managed to bargain for a big discount on their rents, of which more than half got themselves an annual decrease of more than 10 per cent.

And of course, in such favorable conditions for tenants, many of them are inclined to change either the area they are currently living in for a better location or an apartment for something more spacious or more comfortable. But experts draw their attention to the fact that moving can not only fail to save your money, but even require additional expense. This includes the cost of moving, and not only the actual loading, transportation, and unloading, but also a deposit for a new property, plus a commission when signing a new contract.

However, as in the previous quarters over the past two years, landlords offer tenants a lot of privileges, including rent-free periods, quarterly and even monthly payments possibility, short-term rents and the inclusion of service charges into the annual rent.

Regarding the impact of the influx of new properties to the housing market on rental prices, most of the new projects ready for lease, according to Cavendish Maxwell, are concentrated in a few communities, such as Jumeirah Village TriangleAl FurjanDubai Land and Al Barsha. In these areas, 70per cent of new upcoming residential unit handovers is expected. From 5,000 to 7,000 of them are expected to enter Dubai’s housing stock in the fourth quarter.

And although these figures represent a noticeable decrease compared with previous forecasts, this is still a significant amount and a marked increase compared to 2018, when 12,000 apartments and 2,750 villas were delivered.

JLL experts, for their part, note that developers are now launching fewer new projects, but 6,500 units of new housing have already entered the market in the third quarter, bringing the total for the year to 23,000. Most of the new housing was in Sparkle Towers in Dubai Marina, Sidra Villas at Dubai Hills Estate and BLVD Crescent at Downtown Dubai.

Given the general decline in prices for all categories of real estate, many tenants are very likely to become property owners in Dubai, and are increasingly looking for suitable options for themselves. To help them, Dubai Land Department and the Property Finder have recently introduced a new Real Estate Price Index Calculator dubbed Mo'asher, which allows you to compare rental and purchase prices. This instrument provides data starting from 2008 and including the average price per square foot per sale and the average annual rent for leased property.

To always stay up to date with the latest analytics data and real estate prices in Dubai, subscribe to our newsletter using the form below. And in order to sell, lease or buy/ rent housing or commercial properties in Dubai, contact IMEX Real Estate. Our contacts:

Tel. in Dubai, UAE: +971 (50) 2528188 (Whatsapp, Viber, Telegram)

Toll Free Dubai: 800-IMEX (800-4639)

IMEX REAL ESTATE BROKER LLC, UAE

Office 2502, Marina Plaza, Dubai Marina, Dubai, UAE

Email: pm@IMEXre.com

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