Rent hike in Dubai ‘slowest’ since April
But majority of tenants (62 per cent) still expect rental values to increase in the next three months
Published: 10:53 January 11, 2016
By Gulf News
Dubai: The rental market in Dubai is showing signs of cooling down, with real estate agents reporting a “modest rise” in newly agreed rental prices, a new report from a UAE-based bank said.
In its Dubai Real Estate Tracker, Emirates NBD reported on Monday that the leasing market started to cool down at the end of 2015. Property agents said rents continued to move higher, but the latest increase “was the slowest” since April, when the bank started the study.
“There were a number of reports that cooling demand conditions could place downward pressure on newly agreed rents over the next three months. Reflecting this, latest data pointed to a drop in new rental inquiries for the first time since the survey began in April,” the report said.
However, the majority of residents in Dubai (62 per cent) are expecting rents to increase in the next three months, while only a small number (7 per cent) expect to negotiate a reduction.
The Dubai Real Estate Tracker is based on survey data collected from real estate agents and 600 households based in Dubai. A representative sample of adults is achieved by using quota controls set by age, income, nationality, ownership status and type of property.
Respondents were asked about current and future house price sentiment, alongside changes in current and expected changes to rental prices at the renewal stage.
The survey also indicated a subdued end to 2015 for the Dubai property market, with most real estate agents noting declines in new buyer enquiries and transaction numbers over the three months to December.
The bank said the latest drop in new buyer enquiries was the sharpest since the survey began in April, which real estate agents linked to weaker investor sentiment and muted underlying market conditions.
Looking ahead, around 47 per cent of real estate agents expect a fall in Dubai property values over the course of 2016, while 32 per cent forecast a rise.