Dubai: Dubai residents are making the most of a drop in rental prices, even as realty experts project a further fall towards the end of this year as the market is awash with supply of residential units.
According to John Stevens of Asteco, since the beginning of this year, rents in Dubai have dropped 13 per cent for apartments and 10 per cent for villas.
Not only that. The supply of an additional 16,400 ready residential units is expected to enter the rental market, likely pushing rents down further.
Sana Faisal, a realty agent with Indus Real Estate, said Dubailand and Dubai Sports City areas, saw even bigger rental drops.
“In Town Square Dubai, for example, a two-bedroom apartment typically rented for Dh55,000 to Dh58,000 per annum. This has dropped to Dh40,000 to Dh47,000. Three-bedroom apartments were renting from Dh68,000 to Dh72,000. Now they are going for Dh62,000 to Dh64,000 per annum.”
Rents for residential apartments have fallen across the board in 2020, said Faisal, adding that there will be a further decline, at least until the end of the year.
According to Faisal, cheapest areas for rent right now are International City, Dubai Production City (IMPZ), a few projects in Dubai South and Dubailand (Queue Point and Town Square) and Jumeirah Village Circle (JVC).
Oversupply, less uptake
Niraj Masand, CEO, Artha Realty, said overall, rentals for villas and townhouses have comparatively fared better as many residents in the UAE are looking to upgrade their homes from apartments to villas for a certain budget.
He said the primary reason behind the drop is not entirely the coronavirus pandemic. Over-supply and less uptake are the key reasons, he noted.
Stevens added: “On an average, villa rents have fallen 10 per cent year on year (June 2019 vs June 2020) and 13 per cent for apartments from the beginning of this year (Jan 2020 vs June 2020).”