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Due to limited inventory, increased demand from high-net-worth individuals (HNWI), and residents’ preference for more space, rents in Dubai’s mid- to high-end areas are rising.
Although most of the increase has occurred in the villa sector, rents in high-end apartment areas have also moved northward. Industry executives estimate that this upward trend is expected to continue in the near future.
“We have seen rents of new rental houses increase by 3% to 15% year-on-year, especially the high-quality apartments and villa properties in mature villa areas such as Palm Jumeirah, Emirates Hills, Springs, Meadows, The Lakes and The Arabian Ranches As well as apartments in City Walk, downtown, Dubai Marina and Palm Jumeirah,” said Edward Macura, partner of real estate consulting firm CORE.
“Dubai is a safe and open business destination, and the country attaches great importance to job creation and financial incentives. We expect this rent flexibility, or the higher absorption rate of existing rents for Dubai’s prime properties, will continue in the short term,” he Say.
According to second-quarter data from real estate consulting firm Asteco, apartments in Greens, Business Bay and Dubai Marina recorded the highest rent increases in the second quarter. In terms of villas, rents in Arabian Ranches, Dubai Hills, Mildiff, Meadows and Palm Jumeirah increased by more than 10% in the previous quarter.
Reflecting market trends and strong demand for Dubai’s top properties, Palm Jumeirah Villas were rented out at a price of Dh3.8 million in the first week of August 2021, setting a new record in the local market.
Although the 2020 World Expo is expected to boost market sentiment, Markkula said that a series of factors are also jointly affecting the recovery of the rental market, such as the UAE’s flexibility in effectively managing the pandemic and successfully launching vaccines.
Ayman Youssef, vice president of Coldwell Banker in the UAE, said that all villa communities, especially luxury apartments, have seen reasonable rent increases.
According to data from Coldwell Banker, rents on Palm Jumeirah have risen by 10%, District 1 has risen by 12%, Sidra has risen by 32%, downtown has risen by 2.5%, Mira has risen by 11.6% and Spring Sri Lanka is up 4% compared to the southern part of Dubai in the past 12 months.
“People are looking for and turning to higher-quality properties with more amenities and more space. After the lockdown and increased work-from-home situations, people realize the value of having larger houses with gardens and enclosed spaces. Facilities such as communities, swimming pools and play areas. As business improves and mood improves, more and more people are trying to upgrade their living spaces,” Yusuf added.
Where will the rent continue to rise
The vice president of Coldwell Banker pointed out that the rental prices of villas and townhouses-especially Arabella, Mira, Sidra and Maple-will continue to rise. “Dubai South is also expected to grow with the start of Expo 2020 and the demand for residential and commercial space that it will generate.”
Edward Macura of CORE stated that villas on Palm Jumeirah, UAE hills, springs, meadows, lakes and Arabian Ranches, as well as apartments on City Walk, Downtown Dubai, Dubai Marina and Palm Jumeirah, will be in the next 6 to 6 days. Continue to maintain rent flexibility for 12 months.
Market segments
Macura pointed out that the performance of the Dubai residential market is becoming more and more segmented. Since the beginning of 2021, due to limited available inventory in major areas, increased demand from the wealthy, and preference for quality buildings and larger areas, the Rents have risen steadily. And more open space.
“It is worth noting that the price recovery in the entire market is not uniform, and most of the low-end and secondary areas’ stocks continue to face rent contraction and absorption challenges-although the rate of rent decline has begun to slow. Due to supply forecasts for this year and next year Still very high, we expect rents in secondary areas will continue to be under pressure,” he added.
-waheedabbas@khaleejtimes.com
Source: CORE, Coldwell Banker, Asteco, KT Research
Wahid Abbas
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