Average apartment rents in Dubai dropped by 13.4 per cent year-on-year in Q4 2019
Residential rents in Dubai continued to drop in the last quarter of 2019, with apartments posting a double digit year-on-year decrease in rates, a new report has found.
Average apartment rents in Dubai dropped by 13.4 per cent year-on-year in the last quarter of 2019, while villas/ townhouses registered a 9 per cent fall during the period, the report by property consultancy Cavendish Maxwell found.
“Tenants appear to have taken advantage of falling rentals and incentives from landlords, such as rent-free periods and multiple cheque payments, to upgrade to larger units and sought-after villa communities,” the report said.
“In areas such as The Meadows, prices declined at a faster pace than rents, improving the yields on properties for new buyers.”
In terms of property prices, average apartment rates declined by 15 per cent between Q4 2018 and Q4 2019, while the prices for and villas/townhouses dropped by 18 per cent.
“While supply remains the primary driver for price declines, some locations have started to show signs of stabilisation, and even recovery,” the report said.
“Softening prices spurred an increased number of property transactions in 2019, with November marking one of the strongest months in the past decade.”
The total number of transfers in Q4 stood at 12,444 for both apartments and villas/townhouses with off-plan transfers accounting for more than 60 per cent of the total.
Aditi Hariharan, associate partner, Strategic Consulting and Research at Cavendish Maxwell, said: “We step into the new year after a period of prolonged softness in prices and rents primarily driven by oversupply. However, tangible measures have now been taken to curb oversupply, including the formation of the Higher Committee for Real Estate Planning and developers holding back on new launches and focusing on projects under construction instead.
“While we will still see increased handovers as developers fulfill past commitments, most projects are expected to be completed in preparation for Expo 2020, which begins in October. Within the first half the year, we expect over 50,000 units of residential supply to enter the market as developers hand over projects delayed in 2019, which could exert downward pressure on prices. Further cues are awaited from the much-anticipated Expo and any further government policy changes.”
AREAS THAT SAW THE BIGGEST DROP IN RENTS IN 2019
For apartments in Dubai. Data as of November 2019
1. Business Bay
Annual drop in rents: 16.9%
Studio rents: Dhs54,840
One-bedroom rent: Dhs74,160
Two-bedroom rent: Dhs101,300
2. Jumeirah Lake Towers (JLT)
Annual drop in rents: 15.9%
Studio rents: Dhs42,250
One-bedroom rent: Dhs64,240
Two-bedroom rent: Dhs85,800
3. Dubai Marina
Annual drop in rents: 15.8%
Studio rents: Dhs54,040
One-bedroom rent: Dhs78,910
Two-bedroom rent: Dhs114,530
4. Motor City
Annual drop in rents: 15.4%
Studio rents: Dhs46,000
One-bedroom rent: Dhs53,170
Two-bedroom rent: Dhs88,475
5. Dubai International Financial Centre (DIFC)
Annual drop in rents: 14.4%
Studio rents: Dhs63,000
One-bedroom rent: Dhs86,925
Two-bedroom rent: Dhs134,125
5. Jumeirah Beach Residence (JBR)
Annual drop in rents: 14.4%
Studio rents: Dhs63,850
One-bedroom rent: Dhs82,440
Two-bedroom rent: Dhs110,610
7. Dubai Sports City
Annual drop in rents: 14%
Studio rents: Dhs38,500
One-bedroom rent: Dhs56,840
Two-bedroom rent: Dhs86,800
8. The Greens
Annual drop in rents: 12.3%
Studio rents: Dhs50,140
One-bedroom rent: Dhs59,250
Two-bedroom rent: Dhs91,000
9. The Views
Annual drop in rents: 12.2%
Studio rents: Dhs57,340
One-bedroom rent: Dhs75,225
Two-bedroom rent: Dhs100,100
10. Downtown Burj Khalifa
Annual drop in rents: 9.7%
Studio rents: Dhs63,450
One-bedroom rent: Dhs91,140
Two-bedroom rent: Dhs132,890
11. International City (Clusters)
Annual drop in rents: 9%
Studio rents: Dhs24,640
One-bedroom rent: Dhs34,930
Two-bedroom rent: Dhs50,940
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Collected and published by Arms &McGregor International Realty editorial team.