Dubai’s residential rents are not dropping fast enough
In the third quarter, the softening has been limited to a marginal 2%
By Gulf News
Published: 16:30 November 8, 2015
Dubai: Any softening in Dubai’s residential rents is lagging behind the drop in property values, with the third seeing a 2 per cent drop on the rental side. Against that capital values on completed apartments were down 9 per cent year-on-year, with those of prime homes declining by a greater margin, according to the latest market update by MPM Properties, the real estate arm of Abu Dhabi Islamic Bank.
Around 2,000 new units were completed in the second quarter, mostly in leasehold areas.
The total value of residential apartment transactions fell 8.6 per cent quarter-on-quarter, from Dh4.62 billion in the second quarter of 2015 to Dh4.22 billion in the third quarter of 2015. “This is in line with past trends, with the third quarter of the year tending to be a relatively quiet period for the real estate market because of the peak summer and holiday season,” the report notes.
Meanwhile, within the office realty space, controlled supply of new stock coupled with continued positive occupier sentiment is “helping to maintain Dubai’s healthy rental and occupancy levels,” the report finds. “The Dubai office market remained stable quarter-on-quarter despite a rise in new stock, as demand for office space continued to show an upward trend, mainly from start-up companies.”
In the central business district, rents range between Dh110-Dh220 a square foot, while secondary locations are between Dh70-Dh200.