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Premium, affordable locations in Dubai post steepest declines in rent

Newly compiled figures show which communities in Dubai are registering the biggest rental declines

  • 1. Dubai Marina. Rents have fallen fastest in Dubai Marina, with rates registering a 19% decline.Image Credit: © XPRESS / Ahmed Ramzan
  • 2. Downtown Dubai. The second-biggest fall in rents has been reported in Downtown Dubai, with rates registerinImage Credit: Supplied
  • 3. Dubai Sports City. The third-biggest fall in rents has been reported in Dubai Sports City at -16%.Image Credit: Gulf News Archive
  • 3. Bur Dubai. Like Dubai Sports City, Bur Dubai posted the third-biggest decline in rents in September, at -16Image Credit: GN Archives
  • 4. Jumeirah Village Circle posted the fourth-biggest decline in rents at -15%.Image Credit:
  • 4. Deira. Also fourth on the list of places with biggest rental declines, Deira posted a -15% drop.Image Credit: Rajes/Gulf News reader
  • 5. Business Bay. Apartments in Business Bay posted the fifth-biggest decline in rents at 14 per cent.Image Credit: Pankaj Sharma/Gulf News Archives
  • 5. The Greens. Like Business Bay, apartments in The Greens declined by 14 per cent.Image Credit: Stefan Lindeque/ANM

Dubai: Some premium and affordable residential neighbourhoods in Dubai are losing the most rental values – on a percentage basis – according to the latest data compiled by a real estate consultancy firm.

Rents in Dubai Marina, where one-bedroom flats can cost up to Dh95,000 a year, are showing the steepest fall, with overall leasing rates registering a 19 per cent drop in September 2017 over the previous year, figures released by Asteco showed.

Dubai marina

The cost of renting a flat in Dubai has been on a downward path and as of the third quarter of the year, rates fell by 12 per cent on average when compared with a year earlier. The downside has been due to demand failing to keep up with a huge supply of properties.

In Downtown Burj Khalifa, where new high-rise towers are popping up like mushrooms, landlords are likely more open to lower their rates compared to many other locations. Overall rents in the area posted a negative 18 per cent drop, the second-highest among the communities included in the study.

In the affordable category, the two locations with the steepest fall in rents are Dubai Sports City and Bur Dubai, each registering rental dips of -16 per cent.

Dubai Sports City

However, the cost of renting a one-bedroom flat in Dubai Sports City averages Dh59,000 a year, making it a cheaper option compared to Bur Dubai, where a one-bed apartment can set a tenant back between Dh45,000 and Dh80,000 annually.

Residential units in Jumeirah Village and Deira are also registering major price reductions at -15 per cent, while in Business Bay and Greens, costs have fallen by -14 per cent.

The number of new flats delivered between January and September this year, amounting to 10,200 units, has already surpassed last year’s total supply of 8,750 flats, and some 3,500 more units are coming in before year-end.

Tenants who are on the hunt for a new flat today may not just have an upper hand in negotiating with the landlords, they’re more likely to see a lot of empty units to choose from.

According to Jesse Downs, managing director of Phidar Advisory, vacancies are high in established communities, with an overwhelming 35 per cent to 40 per cent of homes lying empty.

“Even in the most popular areas, vacancies are typically around 25 per cent,” Downs said.

Where rents have fallen most:

Dubai Marina
Highest rent: Dh95,000
Lowest rent: Dh55,000
Average rent:  Dh75,000
% Change: -19%


Downtown Dubai
Highest: 120,000
Lowest:  75,000
Average:   97,500
% Change: -18%


Dubai Sports City
Highest: 70,000
Lowest:  48,000
|Average:  59,000
% Change: - 16%


Bur Dubai
Highest: 80,000
Lowest:  45,000
Average: 62,500
% Change: -16%


Jumeirah Village
Highest: 68,000
Lowest:  48,000
Average: 58,000
% Change*: -15%


Deira
Highest: 75,000
Lowest:  35,000
Average:  55,000
% Change: -15%


Business Bay
Highest:  90,000
Lowest:  60,000
Average:  75,000
% Change: -14%


Greens
Highest: 95,000
Lowest:  65,000
Average:  80,000
% Change: -14%

Rental declines in other communities:
 

Palm Jumeirah:
Highest: 150,000
Lowest:  80,000
Average:  115,000
% Change: -13%


Jumeirah Lakes Towers
Highest: 85,000
Lowest:  55,000
Average: 70,000
% Change: -13%


International City
Highest: 52,000
Lowest:  35,000
Average: 43,500
% Change: -13%


Jumeirah Beach Residence
Highest: 120,000
Lowest:  80,000
Average:  100,000
% Change:-12%


Al Barsha
Highest: 75,000
Lowest:  55,000
Average:  65,000
% Change: -12%


Shaikh Zayed Road
Highest: 125,000
Lowest:  70,000
Average:  97,500
% Change: -9%


DIFC
Highest: 130,000
Lowest:  80,000
Average:  105,000
% Change: -8%


Discovery Gardens
Highest: 65,000
Lowest:  50,000
Average:   57,500
% Change: -2%

*% Change is for period September 2016- September 2017
Note: Rental figures are for one-bedroom flats only
Source: Asteco

For information on the real estate sector within the UAE, please visit our sister site, getthat.com.

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