Rentals for premium housing in the elite areas of Dubai such as Palm Jumeirah and JBR fell slightly in the second quarter, according to a recent report by Asteco.
And rentals for Dubai mid-priced property in less prestigious areas even increased during the same period, while rentals in older areas with less developed infrastructure remained unchanged.
Residential areas located along Sheikh Mohammed Bin Rashid Road showed the biggest rental declines during the last three months of the year — by 7%, as well as the manmade island Palm Jumeirah — here rentals fell by 6%, and Jumeirah Beach Residences with 7% rentals decline. At the same time, rentals in such popular and affordable areas of Dubai like IMPZ, Dubai Sports City and Dubai Silicon Oasis has grown over the same period by an average of 6-13%. Almost everywhere in these areas we saw infrastructure projects completion recently, which makes them by far the most popular locations in the Dubai rental market, thereby increasing occupancy level there and stimulating prices growth.
Apartment rentals in Dubai declined overall by 2% in the second quarter, while villas rentals declined by 5%, with the most significant changes tending to prices lowering were observed in the segment of premium housing.
John Stevens, Managing Director, Asteco, said: “The softening in Dubai’s residential rental market appeared earlier than we originally anticipated, offering tenants in the emirate an opportunity to recoup somewhat after several tough years of high rents. The decrease was felt throughout the market and areas with a significant amount of completed new supply were the most affected.” For example, in the villas segment a large number of handovers in Casa Villas and Arabian Ranches caused a decrease in rental prices by 7% in second quarter and by 15% compared to the previous year. On the Palm Jumeirah the completion of townhouses in Palma Residences had a similar effect on prices, causing rentals lowering.