Dubai rents drop for second month - Al Barsha, JVC see major dips

Dubai: For a second month, tenants in Dubai have seen their rents drop at the time of renewing their apartment or villa contracts in more locations. Even when it comes to new leases, tenants are getting some ‘good deals’ that many thought would not have been possible at the start of this year.

And when it comes to rental trends outside of freehold areas, Al Barsha is seeing average rates drop by more than 20% in August compared with what asking rents were in July-August 2024, according to data from GCP-Reidin.

For instance, most of the current listings show rents on a 2-bedroom unit in Al Barsha at Dh125,000-Dh135,000, but a handful even listing closer to Dh100,000.

“Rents have dropped in upscale locations such as The Lakes and Green Community as well as in areas like Al Barsha,” said Eima Hajimalian of GCP Properties. “And rents have flat-lined in Jumeirah Village Circle and The Springs.”

Of these, for residents wanting to select more budget-lite options, the best piece of news would be that JVC rents are stable. At the start of this year, the sprawling residential community had one of the highest year-on-year growth in rents.

In areas such as Discovery Gardens, rent increases have been at or under 5%, with many landlords opting not to ask for increases for tenants entering their second year renewals.

Listings for 2-bedroom units at JVC show a wide range of options, from Dh74,000 to Dh130,000 (and even costlier options). But the main takeaway is that those less costly rental choices are there – even as JVC remains one of the most sought after locations.

Now, apart from the rent drops, the other prominent detail emerging from the July and August transactions are the drop in volumes at many of these established communities.

This could be that those tenants could have moved out to new buildings elsewhere. Or even shifted to less expensive rental options in Sharjah.

One of the few locations in Dubai that continues to see higher rents on renewals and new leases is Silicon Oasis, according to data from GCP Properties. One-bedroom apartments there are averaging Dh60,000, while 2-bed units are pushing towards the Dh80,000-Dh90,000 range.    

“Dubai Silicon Oasis seems the exception, but when you check the August data for rates and volumes, there are declines in Arjan, Liwan, the Greens as well as in the number of renewals happening in Business Bay.

“The notable locations that did see an uptick in volumes were the Palm Jumeirah and Downtown Dubai.”

Even then, there are brokers and landlords who say the rent declines are a ‘temporary’ summer phenomenon. They point to the number of new residents expected in Dubai over the coming months, as well as new stats that show the population of the city heading for consistent increases.   

This will also be closely tracked by new property buyers wanting to rent out their units. "These investors will not want to be in a situation where they are getting less than expected as rents - and paying more on service charges," said an estate agent.