New tenants pay higher rents in Dubai – News

Rents will remain high in the second half of the year, but rental growth is expected to slow eventually, experts say

Jumeirah, Emirates Hills, Downtown Dubai, Arabian Ranches, Business Bay, Dubai Marina and Discovery Gardens remained the top choices for renters in the first half of the year. — file photo

Despite rising demand for apartments and villas in the second half of 2022, tenants will continue to pay higher rents for new contracts in Dubai, but the Real Estate Regulatory Authority (Rera) will limit the rise in lease renewals, experts say.

Rents continued to post double-digit growth in the first half of the year, analysts and executives said, as landlords raised prices amid increased demand and a lack of available inventory, especially in popular villa communities. They expect rents to remain high in the second half, but expect rental growth to eventually moderate.

Residential rents in Dubai are on average 20% higher than last year, said Haider Tuaima, director and director of real estate research at ValuStrat.

“This increase only applies to new rents, as the contract amount for renewals is limited by the Rera rent calculator,” Tuaima told Cali era.

He said the current trend had slowed, especially in the villa segment, as condos rose 4.2 per cent, while villas rose 3.3 per cent quarter-on-quarter. Rental growth is expected to continue to moderate in the second half of the year,” he said.

Swapnil Pillai, associate director of research at Savills Middle East, sees positive trends in the rental market in the consultancy’s latest report, which says Dubai rents are growing rapidly, benefiting from higher rents in other markets. Broad lifestyle trends, recorded 5.3%

“The outlook for prime residential rental growth remains positive as demand for the types of units sought after by tenants continues to outstrip supply,” Pillai said.

“Renting remains a practical but short-term solution for those looking to experience a location or accommodation before making a long-term and often expensive commitment. Large living and outdoor areas that favour a mixed working model will continue to be A key consideration,” he said.

High Net Worth Individuals, Investors Relocating

Ata Shobeiry, CEO of Zoom Property, said Dubai’s rental market has been on the rise, with annual growth rates of about 21% and 22% for apartments and villas respectively, mainly due to the influx of wealthy individuals and investors. Dubai their main place of residence.

“The emirate’s business-friendly policies have also contributed to this growth. The same trend is expected to prevail in the second half of the year,” Shobeiry told Reuters Cali era.

Demand for short-term rentals will increase due to the upcoming FIFA World Cup in Qatar later this year, he said.

lack of villas

Real estate agency Betterhomes said in its latest report that average leases for condos and townhouses climbed 29% and 33%, respectively, while average leases for villas rose 64%, as a lack of supply of villas as landlords continued to take advantage of current sales Momentum, sell and exit the market.

“Due to rising prices and tight supply, more and more renters are choosing to stay put, negotiating and extending their current leases with landlords, rather than entering the competitive rental space. As a result, Betterhomes saw a 25% drop in rental transactions According to Betterhomes, inquiries fell by 17%.

Popular areas for rent

Responding to questions, Shobeiry said Jumeirah, Emirates Hills, Downtown Dubai, Arabian Ranches, Business Bay, Dubai Marina and Discovery Gardens remained the top choices for renters in the first half of the year.

On top of this, he said, demand for rental properties has grown in The Greens, Liwan, Living Legends and Discovery Gardens.

“I believe these regions will also continue to dominate the rental market in the second half of 2022,” he said.

Elaborating on tenants’ priorities when looking for rental properties, he said many factors drive the rental market.

“I believe it varies from person to person. But generally, people look for areas of accessibility and coverage. Configuration, nearest landmarks and amenities are other considerations. The demand for properties with facilities has increased,” he said.

— muzaffarrizvi@khaleejtimes.com