Cheapest community to rent in Dubai: Studio @ Dh38,000, one bed @ Dh49,000
Landlords of new units offer better leasing terms to renters: MPM Properties
By Parag Deulgaonkar
Published Wednesday, May 18, 2016
Apartment rents remained stable in Dubai in the first quarter 2016, but registered an annual decline of nine per cent, according to MPM Properties, the real estate advisory subsidiary of Abu Dhabi Islamic Bank (ADIB).
In its first quarter 2016 report, the consultancy said absorption rates across affordable and mid-market units were relatively higher compared with high and luxurious properties.
Among the freehold communities, The Greens registered the biggest annual decline of 6 per cent, but remained stable in the first quarter 2016 compared with fourth quarter 2015. Rentals for studio, one- and two-bed units stood at Dh70,000 per annum (pa), Dh88,000 pa and Dh130,000 pa, , respectively.
Business Bay saw an annual decline of 5.45 per cent, while quarter-on-quarter (q-o-q) decrease was just over one per cent. Average rents for studio units stood at Dh68,000 pa, one-beds at Dh85,000 pa and two beds at Dh120,000 pa.
Annual rents in Jumeirah Lakes Towers fell by of 5.32 per cent, but rose by 2.5 per cent q-o-q. Studio, one- and two-bed apartment were available for Dh65,000 pa, Dh88,000 pa and Dh120,000 pa, respectively.
Lease rates in Tecom declined by 4.5 per cent, but remained stable in the q-o-q. Annual rents for studio, one- and two-bed units stood at Dh60,000, Dh83,000 and Dh108,000, respectively.
Among the 11 freehold communities compared by the consultancy, the cheapest studio, one- and two-bed units were available in International City. Average rents stood at Dh38,000 pa, Dh49,000 pa, and Dh73,000 pa, respectively.
The costliest community to rent a studio, one- and two-bed units was Palm Jumeirah, with annual rentals at Dh90,000, Dh125,000 and Dh165,000, respectively.
During the period, nearly 2,900 new residential units (apartments and villas) entered the market, bringing the total residential stock to 484,000 units.
The consultancy estimates there are 13,500 units under construction that are due for completion across 2016 with key projects include Living Legends, Millennium Estates in Meydan, Mira, Palma and Rosa villas from Arabian Ranches.
Landlords of upmarket properties were offering better terms to retain existing tenant as maintaining healthy occupancy rates was as crucial as sourcing new tenants.
“New projects handed over during the past six months have witnessed reducing asking rents, the report said, clarifying that the rents were not driven by market dynamics but due to high asking prices originally demanded compared to prevailing market rents,” MPM Properties said.
The consultancy forecasts that rental values in sub-prime areas are likely to correct during the course of the year, as the majority of the pipeline supply is expected to enter from these locations.