Dubai: Rental prices of properties around the just opened Dubai Canal are expected to go up over the coming months after a relative slowdown triggered by a number of factors.
Dilip Daswani, managing director of Capitol Real Estate, told XPRESS, “I see an increase in prices by 20 per cent when the shops and restaurants open along the Dubai Canal in the next 12-18 months.”
He said the main areas benefiting from this new landmark are Business Bay, Sheikh Zayed Road, Safa, Al Wasl Road and Jumeirah Beach Road.
Big increase
Daswani said, “The market has been in a relatively quiet mood. We are noticing a big increase in demand for properties that face or are directly along the canal like Citadel, Manara and XL Tower in Business Bay. Suddenly, units that were lying empty for months are now getting enquiries and tenants. Since the canal opened, I have rented three units in XL Tower alone which is right on the canal with an excellent view of the waterfront.”
The last few days have seen a number of trend reports being published by realty observers. Most of them have focused on the general flattening out or decline of rents across Dubai with upscale neighbourhoods being hit by oversupply, job-related uncertainties and other factors.
Flat rates
Lukman Hajje, CCO, propertyfinder Group, said, “Rents have been dropping across most communities since the start of the year. Those in and around the Canal at either end also followed this trend. Jumeriah villas have remained flat at a median advertised price of Dh62 per sqft (Jan vs Nov 2016). Business Bay apartments have dropped 6.3 per cent since January down to a median advertised price of Dh92 per sqft in November.Villas for rent in Al Wasl have also dropped by a similar amount, declining 6.7 per cent since January to a median advertised price of Dh65 per sq ft. Median advertised apartments for rent in Dubai Festival City have also dropped 9.5 per cent (Jan vs Nov 2016) and are now just Dh79 per sqft.”
But going forward, he said he sees increases in property prices and rents in the months and years ahead once the foreshore attractions at the Dubai Canal are finalised.
Central location
Mansoor Darvesh, general manager of Loyal Real Estate, said the market in recent months reflected global uncertainties in the run up to the US elections besides job insecurities and oil price decline.
“It’s the smaller properties with rents below Dh150,000 that have been moving. Landlords looking for Dh200,000 or more have been stuck. But we hope the situation will change in the near future,” he said
One broker who did not want to be named said tenants in areas like Jumeirah, Safa and Umm Suqeim have a wider range of options to pick from than ever before. So they have tended to negotiate better deals with landlords, failing which have gone on elsewhere.
He said, “Now there will be reverse trend back into these areas with the Dubai Canal and its expected retail offerings having a magnetic pull on tenants. Let’s not forget that these areas are prime and their central location gives them a big edge over the freehold areas of New Dubai.”
