Rents in Dubai's key residential areas to remain stable

Dubai: Key residential areas in Dubai will be able to maintain stable rent levels while lower-quality buildings in the least developed and integrated communities will continue to see a fall in values, a property advisory firm said.

According to Landmark Advisory’s April 2010 Dubai lease guide, the risk in both the residential and commercial property markets continue to be the new supply that is expected to enter the market during the next three years, “which further encourages value-seeking behaviour among potential tenants”.

“Lease rates in most areas, in both the residential and commercial markets, will fall in the coming months, especially for lower quality buildings in the least developed and integrated communities. However, certain residential units in key locations within established high quality developments will remain stable. This applies to specific villa developments and select apartment buildings,” said Jesse Downs, Landmark’s Director of Research & Advisory Services.

Increased supply has put downward pressure on rent in many areas, including some well-established quality locations, Landmark said.

Places such as Palm Jumeirah and Dubai Marina have seen an increase in supply following new product deliveries with lower limits.

Rents for two-beds on Palm Jumeirah have fallen 4 percent from Dh120,000 to Dh115,000 per annum while two-beds in Dubai Marina have fallen 6 percent from Dh90,000 to Dh85,000 per annum.

“This is a typical trend observed in both recently-handed over buildings and lower quality buildings,” Landmark said.

Villa lease rates have remained relatively stable in certain areas like Arabian Ranches, Victory Heights, with parts of the Lakes experiencing lower-limit declines, it said.