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Revealed: Where residential rents are rising and falling in Dubai

The cost of renting a home in the emirate is on an upward trajectory, say experts



by

Waheed Abbas

Published: Fri 28 Jan 2022, 10:05 AM

Dubai’s rental market will take a turn in 2022, becoming more favourable for landlords after being remaining tenant-friendly for years as rents in some areas have recovered to the peak level seen in 2014.

Real estate consultants believe that rental demand for villas and larger units will remain strong in 2022 as well as work-from-home continues for many firms amidst the Covid-19 pandemic.

The local rental market has been consistently going down over the past few years, but now it has almost bottomed out and it’s back on an upward trajectory.

“Rental market to balance out and start favouring the landlords after being tenant-friendly for years. However, rental rises will not be uniform across the city. Covid-19 variants will continue to impact remote working, thus keeping demand for villas and larger units strong,” says Prathyusha Gurrapu, head of research and advisory at real estate consultancy Core.

The latest data for the fourth quarter of 2021 showed that rents for villas continued to recover faster than apartments with city-wide villa rentals rising on average by 21 per cent.

According to real estate consultancy ValuStrat, Dubai residential rents witnessed the highest increase since 2014, increasing by 18.9 per cent year-on-year.

Average annual rents for 2-bedroom villas stands at Dh117,000, 3-beds at Dh166,000, and 4-bedroom villas at Dh235,000. The average rent per annum for a studio apartment at Dh38,000, 1-bed at Dh57,000, 2-beds at Dh81,000, and 3-bedroom apartments reached Dh126,000 by the end of 2021, ValuStrat said.

Villa rents are rising in:

  • Palm Jumeirah
  • The Lakes
  • Arabian Ranches
  • Jumeirah Park
  • Dubailand
  • The Springs
  • The Meadows
  • Jumeirah Village Circle

Apartment rents are rising in:

  • Palm Jumeirah
  • The Green and The Lakes
  • Downtown
  • Dubai Marina
  • Business Bay
  • Jumeirah Village Circle
  • Jumeirah Lake Towers

Apartment rents are falling in:

  • Discovery Gardens
  • Dubai Sports City
  • Dubailand

Rentals reaching 2014 peak value

Gurrapu said Palm Jumeirah villa rentals overshot the market due to very limited supply after seeing strong take-up from local and global millionaires since the start of the pandemic.

Palm Jumeirah is “now at par with its 2014 peak values and is expected to see a continued rise in values due to its global appeal, water-front location and limited new-built or refurbished stock. That said, all other villa districts are still well below their 2014 peak values, albeit expected to inch towards them over 2022,” she added.

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In the villas segment, Palm Jumeirah witnessed the biggest increase in rentals of 34 per cent followed by The Lakes, Arabian Raches, Jumeirah Park, Dubailand, The Springs, The Meadows, Jumeirah Village Circle and Emirates Hills.

Similarly, many apartment areas have started to see notable year-on-year growth after displaying a lag in performance.

In the apartment category, the biggest rise is being witnessed in Palm Jumeirah, The Green, The Meadows, Downtown, Dubai Marina, Business Bay, Jumeirah Village Circle, Jumeirah Lake Towers and Dubai International Financial Centre. While rentals in Discovery Gardens, Dubailand and Dubai Sports are still going down. While rents in City Walk remain stagnant.

“With supply projections for apartments remaining high in 2022, we expect rents in sub-urban apartment districts to remain relatively under pressure over 2022,” she added.

-waheedabbas@khaleejtimes.com


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