Dubai: Here’s where rents are dropping, rising the most

Apartment rentals in Dubai will continue to decline for the remainder of 2021 but some prime and up-and-coming communities are seeing an increase in rentals due to residents continuing to flock to high-end apartments following consistent decline of rents over the years.

The Dubai market’s performance is currently clearly fragmented. Villa rents on average increased by 4.7 per cent, whereas average apartment rents have fallen by 10.3 per cent in the past 12 months to April 2021.

It is currently estimated that around 17 per cent of property units in Dubai are vacant, making the market highly tenant favourable.

Despite an upswing in certain areas, HP Aengaar, CEO of Asteco, says landlords continue to offer incentives including discounts, flexible payment terms of up to 12 cheques, options to pay with debit and credit card and agency fee waivers to retain tenants. However, Aengaar said this could change if the demand continues to increase.

Asteco foresees 30,000 apartments and 5,000 villas hitting the market in Dubai this year.

Where rents are falling

Taimur Khan, head of research at CBRE Middle East, said the most significant declines in rental rates between January to May 2021 have been seen in Al Jadaf, Bluewaters Island, Trade Centre, The Greens, Barsha Heights and Jumeirah Lake Towers (JLT).

“One of the trends which has underpinned these declines, in most of these locations, is flight to quality, with tenants taking advantage of a more favourable market to move into newer developments and communities which offer more integrated amenities,” said Taimur.

However, some communities buck the trend and display a more balanced market where landlords have been able to secure material increases in rents, he added.

“We expect greater tenant demand as the economy further improves on the back of strong government initiatives, however, the apartment rents are expected to recover at a slower pace,” he added.