Revealed: Where residential rents rise and fall in Dubai – News

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



Published: Fri 28 Jan 2022, 10:05

Dubai’s rental market will take a turn in 2022, becoming more landlord-friendly after being tenant-friendly for years, as rents in some areas have returned to 2014’s record highs.

Property consultants believe that rental demand for villas and larger units will remain strong in 2022 and that working from home continues for many businesses amid the Covid-19 pandemic.

The local rental market has been steadily declining for the past few years, but now it has almost bottomed out and is back on an upward trajectory.

“The rental market needs to balance out and start favoring landlords after years of being tenant friendly. However, rent increases will not be uniform across the city. Variants of Covid-19 will continue to impact remote working, thus maintaining demand for larger villas and units,” says Prathyusha Gurrapu, Head of Research and Consulting at real estate consultancy Core.

The latest data for the fourth quarter of 2021 showed rents for villas continuing to recover faster than apartments, with citywide villa rentals increasing by an average of 21%.

According to real estate consultancy ValuStrat, residential rents in Dubai have seen the biggest increase since 2014, increasing by 18.9% year-on-year.

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

Villa rents increase by:

Apartment rents increase by:

Apartment rents are falling:

Rentals Reaching 2014 Peak Value

Gurrapu said villa rentals in Palm Jumeirah have outpaced the market due to very limited supply after seeing strong uptake from local and global millionaires since the start of the pandemic.

The Palm Jumeirah is “now at the same level as its 2014 peak values ​​and is expected to experience a continued increase in values ​​due to its global appeal, waterfront location and limited inventory of new or renovated construction. This said, all other villa districts are still well below their 2014 peak values, although they are expected to approach them in 2022,” she added.

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Within the villa segment, Palm Jumeirah saw the highest rental increase of 34%, followed by The Lakes, Arabian Raches, Jumeirah Park, Dubailand, The Springs, The Meadows, Jumeirah Village Circle and Emirates Hills.

Similarly, many apartment areas have begun to see notable year-over-year growth after lagging in performance.

In the apartment category, the biggest increase is seen 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 at Discovery Gardens, Dubailand and Dubai Sports are still down. While rents in City Walk stagnate.

“With apartment supply projections remaining high in 2022, we expect rents in suburban apartment neighborhoods to remain relatively under pressure in 2022,” she added.

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