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Industry executives attribute higher costs to influx of foreign workers in UAE
Residential rents are rising in almost all areas of Dubai except Arjan, Bur Dubai and Liwan, where average rents rose more than 13% in March, the highest growth rate in seven years.
Industry executives have attributed the rise in rents to the influx of foreign workers in Dubai as businesses relocate here after successfully dealing with the Covid-19 pandemic. This was evident in figures released last week by the Dubai Statistics Centre, which showed the UAE has a population of more than 3.5 million.
According to CBRE’s Q1 report, average rents for apartments and villas increased by 11.7% and 22.5% respectively to AED80,000 and AED238,441 a year in March 2022.
The most expensive annual rentals for apartments and villas were found in Palm Jumeirah with an average asking price of AED197,482, while in Al Barari, the average asking price was AED801,940.
Where apartment rents are rising faster
| area | Rent Increase Percentage |
| business bay | 4.9% |
| International City | 4.2% |
| Dubai Marina | 4.1% |
| Damak Mountain | 4.1% |
| Palm Jumeirah | 3.9% |
| old Town | 4.0% |
| JBR | 3.5% |
| Downtown Dubai | 3.3% |
| sports city | 3.2% |
| Jumeirah | 3.1% |
Where apartment rents are falling
| area | % rent drop |
| Liwan | -0.9% |
| Bur Dubai | -0.6% |
| Agen | -0.4% |
Where villa rents are rising
| area | Rent Increase Percentage |
| Jumeirah | 4.8% |
| sustainable city | 4.8% |
| Emirates Hills | 4.7% |
| Arabian ranch | 4.5% |
| Damak Mountain | 4.5% |
Where Dubai villa rents are falling
| area | % rent drop |
| Della | -1.9% |
| Jumeirah Park | -1.6% |
| Rem | -1.2% |
| Alfyan | -0.4% |
resource: CBRE, KT Research
The property consultancy’s report showed that apartment rents in Business Bay increased the most at 4.9%, followed by International Cities at 4.2%, Dubai Marina and Damak Hill (Akoya) at 4.1%, Old Town (Bath) at 4.1%. Takia) was 3.9%. The five areas with the smallest rental increases include Dubai Residential, Green Communities (DIP), The Views, Dubai Silicon Oasis and The Greens.
In the apartment sector, rents fell in Arjan, Bur Dubai and Liwan, while in the villa sector, rents fell in Jumeirah Park, Deira, Reem and Al Furjan.
Silver Heights Holding chairman Samir Munshi said rents in the mid-market and affordable markets would continue to rise by about 20 per cent. However, in the luxury market, the market will consolidate as rents have peaked in the past 18 months.
“We now have to consider a few facts: First, the end of Expo 2020 means that a lot of Expo-related demand has ended. The Covid-19 situation has improved globally. As a result, global travel restrictions have eased. So “While a lot of people will be coming into the country for new jobs or starting businesses, a lot of people are also going out. That’s why the luxury real estate market will consolidate, but the demand in the mid-market will accelerate,” said Real Estate Brokerage, Investment and Development. Meng Shi, an industry veteran, said.
Imran Farooq, CEO of Samana Developers, said rental demand for residential units has been very strong and will remain high throughout the year as free zones and licensing authorities have seen an unusual increase in the issuance of new permits, leading to an influx of foreign Workers enter the UAE.
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Farooq added: “With such a large number of new trade licenses issued by the Emirate of Dubai, it is clear evidence that big businesses are moving to Dubai post-Covid, which will continue to bring more and new residents to Dubai.”
He said demand for office rentals has also been fairly strong over the past three months due to the inflow of new business. “Grade A office rents have risen by 30-40%, which means more demand from businesses relocating to Dubai. Initially, demand growth started with villas and townhouses, but now there is a very strong trend across all sectors, ” Farooq added.
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