Dubai: Where apartment, villa rents have increased and decreased

Costs are rising at fastest rate in 8 years



by

Waheed Abbas

Published: Mon 18 Jul 2022, 1:49 PM

Last updated: Mon 18 Jul 2022, 7:14 PM

Residential rents continue to accelerate in most of the areas of Dubai, with Discovery Gardens, Living Legends, Downtown, Jumeirah and Dubai International Financial Centre (DIFC) areas registering the biggest increases.

Real estate analysts and industry executives say that the rents are increasing at the fastest pace in the past eight years mainly due to the increase in population post Expo 2020, and the introduction of new reforms such as the Golden Visa which attracted a lot of investors and high net worth individuals to the emirates.

Industry insiders say that foreign investors are increasingly making Dubai their primary residence in the post-pandemic period due to business-friendly policies, fresh incentives for investors and better quality of life.

Dubai’s population crossed the 3.5 million mark recently and stood at 3,517,303 on July 18, according to Dubai Statistics Centre.

According to CBRE’s latest data, average rents in the 12 months to June 2022 increased by 21.7 per cent with average apartment and villa rents rising 21.2 per cent and 24.7 per cent, respectively. As of June 2022, average apartment and villa rents stood at Dh85,204 and Dh255,437 per annum, respectively.

The highest average annual apartment and villa rents respectively were found in Palm Jumeirah, where asking rents on average were Dh218,413 and in Al Barari, where asking rents average Dh880,225 per annum.

Where rents are rising for apartments:

AreaIncrease
Discovery Gardens4.9%
Living Legends4.8%
Jumeirah4.3%
Downtown 4.3%
DIFC4.3%
Arjan3.8%
Liwan3.7%
The Greens3.4%
Festival City3.0%
Business Bay3.0%

Where rents are falling for apartments:

AreaDecrease
Green Community (DIP)-3.4%
The Old Town-2.0%
Deira-1.2%

Where rents are rising for villas:

AreaIncrease
Emirates Hills4.9%
Jumeriah Islands4.9%
The Sustainable City4.8%
Jumeirah Park4.7%
Victory Heights4.6%
Jumeirah Gold Estates4.3%
Mudon 4.3%
Jumeirah4.3%
Palm Jumeirah3.9%
Arabian Ranches3.2%

Where rents are falling for villas:

AreaDecrease
The Meadows-2.2%
The Springs-0.4%
Green Community(DIP)-0.1%

Source: CBRE, KT Research

Taimur Khan, head of research for Mena at CBRE in Dubai, said the rate of price growth has tapered to 10.1 per cent in the year to June 2022 while the rate of rental growth continues to accelerate, where rents increased by 21.6 per cent over the same period. “Rents, on average, are increasing at the fastest rate since mid-2014,” said Khan.

Imran Farooq, CEO, Samana Developers, said Dubai real estate has been booming post Expo 2020 with many other sectors and businesses also flourishing after the successful handling of the pandemic by the government.

“The UAE’s handling of the pandemic was unprecedented which encouraged the ultra-rich to move to Dubai. In addition, UAE Golden Visa success has encouraged thousands of investors to make Dubai their primary residence,” he added.

According to Allsopp & Allsopp data, the top three areas for rentals were Dubai Marina, Downtown Dubai and Dubai Hills Estate and the top three nationalities for tenants were British, Russian and Indian.

“As rental activity is increasing across the city. Q2 was also a great month for us in rentals, we had a 25 per cent increase in rental contracts compared to Q1. We also saw property management contract numbers increase by 13 per cent from Q1 2022 to Q2 2022. This could be an indication of more investors entering the market to take advantage of high RoI with average rental prices on the rise across Dubai,” said Lewis Allsopp, CEO of Allsopp & Allsopp.

The top three areas for short-term rentals in June were Dubai Creek Harbour, Dubai Marina and Jumeirah Village Circle.

Lewis said it is great to see new areas enter the top 3 when it comes to rental transaction numbers. “Dubai Creek Harbour is becoming increasingly popular with residents of the city. It is a great option for those who work in Downtown Dubai, Business Bay and DIFC with its proximity to the areas and easy transport links,” he added.

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