The tipping point may have been reached in how fast residential rentals can go up in Dubai, according to a Gulf News report.
Around 19,000 new homes are scheduled to enter the market next year, a figure that is already quite significant and will definitely contribute towards stablising rental hikes.
A sizable portion of the new supply (29%) [are] expected at the Dubailand master-development, according to the latest update from the consultancy CBRE. Rents in Dubai had seen increases of “close to 50% during the past two years”, the report added.
Even now, resistance is starting to build up against unfettered rental hikes. According to CBRE, rents actually dipped by 1% during the third quarter — this after 10 consecutive quarters of increases. “However, the percentage drop has been higher for some individual developments — the highest falls were noted within Dubai’s freehold developments, while rental rates across leasehold areas remained more stable with few areas still registering an increase’, the report said.
Based on its transaction data for the third quarter, locations such as International Media Production Zone, Tecom C and Downtown Dubai may have seen a 3% trim in rental demands. Other clusters such as Business Bay, Jumeirah Lakes Towers and Dubailand Residences recorded rent dips of around 2%.