DUBAI: Rents in Dubai have risen by around 10.4 per cent due to increased demand by tenants shifting homes in search of better rentals.
According to real estate information company REIDIN.com, villa and apartment rents rose by 11.7 per cent and 8.6 per cent last year.
“There is higher demand coming from people who wish to buy properties in Green Community rather than renting”Share on facebookTweet this
Ahmad Kayhan, Chief Executive, REIDIN.com, said: "Key drivers for a rise in rents have been inflation and increased demand from people in constant search of affordable accommodation. With no fresh supply of properties, the rental prices are likely to go up even further."
According to data compiled by REIDIN.com, Dubai Sports City and Discovery Gardens were the only areas that did not see any rental movement in 2011. International City on the other hand recorded a 7.5 per cent increase in rents from Dh66.96 per square foot per annum (p.a.) in March last year to Dh72 per square foot.
One of the highest growth rates in New Dubai has come from Emirates Living comprising The Springs, The Meadows and The Lakes. The rents in these areas have gone up 10 per cent to Dh59.16 per square foot from Dh53.76 in March 2011.
According to Harbor Real Estate, the spike is because New Dubai tenants keep scouting for better deals in new developments. "We are seeing an active migration of tenants from ‘older' areas to newer ones that offer value-for-money. The occupancy levels in Dubai are increasing. And since it will take another two years for most major projects to get complete, the rents at existing properties are likely to go up," said Pooja Banwani, Senior Property Consultant, Harbor Real Estate.
Demand for facilities
Asteco Property Management said the demand is high for apartments and villas which have retail and leisure amenities. "Properties in well-developed areas are witnessing higher occupancy rates than others. Downtown Dubai has done particularly well. A one-bedroom apartment here could rent out for anything between Dh85,000 and Dh95,000. Rents of three-bedroom apartments range between Dh180,000 and Dh220,000," said Vineet Kumar, Associate Director — Agency, Asteco Property Management.
Better Homes said buildings with attractive views command the highest rents.
Adam Stockley, Residential Leasing Consultant, Al Barsha, Better Homes cited the examples of two such buildings - Marina Promenade and Emaar Original 6 Tower where two bedroom apartment rents range between Dh130,000 to Dh160,000. Group Se7en Properties said there was a keen interest in Dubai Marina and Downtown Dubai. "A year ago a two-bedroom apartment in Downtown Dubai was going in the range of Dh110,000 to Dh120,000. Now they are leasing in the range of Dh140,000 to Dh160,000. In December 2010, a three-bedroom apartment in the same area was leasing between Dh180,000 and Dh190,000. Now they are around Dh250,000. In Dubai Marina there is high demand for rentals in new projects like Park Island and Marina Promenade," said Monika Pawlowska, Senior Property Consultant, Group Se7en Properties.
Square Feet Realtors, which deals with sale and lease of Green Community, said that while the development did not witness any significant rise in rentals, it attracted higher demand from buyers.
"There is higher demand coming from people who wish to buy properties in Green Community rather than renting," said Harry Singh, Sales Manager, Square Feet Realtors.
Studio apartments in Green Community are renting for around Dh30,000, one-bedroom apartments for Dh50,000, and two-bedrooms between Dh100,000 and Dh120,000.