Dubai: As thousands of new apartments and villas were delivered in Dubai recently, residential rents dropped further by an average of three per cent in June, according to a report released on Sunday.
The latest report by Abu Dhabi Islamic Bank (ADIB) and MPM Properties showed that Dubai’s residential stock surged to nearly half a million (479,000) villas and flats, as 6,750 new properties were added during the second quarter this year.
The new report echoes previous studies that demonstrated a downtrend in Dubai’s residential rents. However, this doesn’t mean that all apartments and villas in Dubai are now cheaper compared to the previous months. Some areas in Dubai, especially those that are popular among the middle-income residents, are still registering rental increases.
In its second quarter report, Asteco said rental rates for apartments and villas across Dubai fell by 2 per cent on average in the second quarter compared to the first quarter of the year. Villa rates registered a significant decline of 5 per cent year-on-year.
The highest quarter-on-quarter declines were noted in properties along Shaikh Zayed Road (7 per cent), Palm Jumeirah (6%) and Jumeirah Beach Residence (7 per cent). Apartments in IMPZ, Dubai Sports City and Dubai Silicon Oasis, however, showed rental increases of between 6 and 13 per cent.
According to ADIB and MPM Properties’ report, Dubai’s completed apartments saw capital values dropped by 3.5 per cent quarter-on-quarter. Among the areas monitored, Business Bay registered the biggest decline of 5 per cent.
The market data and rental indices mentioned in the report were based on the live transactions from MPM’s agency team and its property portfolio of over 23,500 residential properties, offices, hotels and malls.
“The volume of new projects in the Dubai market means that properties will increasingly need to appeal to potential buyers’ sense of value,” said Paul Maisfield, CEO of MPM Properties, a real estate advisory subsidiary of ADIB.
“That means a shift towards well-managed, self-contained mid-market properties, particularly close to the Expo 2020 site. We are also seeing a greater emphasis on buyer incentives and unique selling points, especially in the luxury segment and expect buyers to benefit from these trends.”