Dubai rents drop: Business Bay, Sports City and Jumeirah Park
Lease rates dip on average by 1% in villa communities
By emirates 24/7
Published Sunday, October 18, 2015
Rents remained stable in most locations across Dubai, but fell by two and three per cent in Business Bay and Dubai Sports City respectively, according to the latest report by Cavendish Maxwell.
Rates fell by up to three per cent in Victory Heights and Jumeirah Park from the previous quarter, with prime locations continuing to demand premium rents, the real estate consultancy said in its third quarter 2015 report.
One-bed apartment in Downtown Burj Khalifa was being rented from Dh110,000 to Dh125,000 per annum (pa), while one-bed unit in the Views or Greens ranged from Dh95,000 to Dh110,000 pa.
Lease rates fell on average by one per cent in villa communities such as the Meadows, the Springs and the Lakes, but these communities continued to report strong rental activity during this year.
The first nine months of 2015 saw delivery of 6,000 residential units. These figures exclude serviced/ hotel apartments, the report said.
Completed developments were primarily delivered in Dubai Sports City, Dubailand, International City, Jumeirah Golf Estates and Jumeirah Village Circle. Over 70 per cent of the completed developments were in the apartment category, while the remaining 30 per cent fell in the villa and townhouse segment.
“There were approximately 18,000 residential units scheduled to enter the market in 2015. Of those 6,000 units have been completed so far. We have seen many developments initially scheduled to be completed at the end of 2015, delayed to the first half of 2016 or to a later date in 2017,” Cavendish Maxwell said.
Price fall continues
Overall, apartment prices continued to drop, however, the rate of decline in prime locations such as Business Bay, Downtown Burj Khalifa and Palm Jumeirah decreased.
In the third quarter 2015, prices continued to decline at the same rate as the previous quarter in Dubai Marina, the Greens and Views, Jumeirah Beach Residence and International City. Dubai Sports City and MotorCity declined at a more accelerated rate throughout this quarter.
Prices in secondary locations such as International City, MotorCity and Discovery Gardens declined the maximum, falling 10 per cent, 10 per cent and 9 per cent, respectively, over a 12-month period from Q3 2014. In the more central and established areas, prices slipped by four to five per cent during the same period.
“These slower rates of decline may suggest that prices will level out and stabilise leading to the end of this year,” the consultancy said.
Decline in villa prices slowed in the quarter-on-quarter in communities such as Jumeirah Golf Estates, the Meadows, the Springs and the Lakes. Price declines accelerated significantly in Jumeirah Islands, Victory Heights, Arabian Ranches and Al Furjan.
Jumeirah Golf Estates villa prices fell by one per cent as against a three per cent decline in the previous quarter.
Prices in the villa market declined by nearly 4.4 per cent in the first nine months of 2015 and nine per cent over a 12 month period.
The consultancy believes additional supply entering the market could place further pressure on prices to the end of 2015 and through 2016.
“Factors such as the estimated population and job growth leading to the year 2020, alongside the UAE’s initiatives to encourage investment, will support the absorption of this upcoming supply,” it added.