Dubai home rents turn even more affordable - now at lowest levels since 2011 - Gulfnews.com
Dubai: Rents at some of Dubai’s most budget-friendly residential locations – Jumeirah Village, Discovery Gardens and International City have dropped to levels last seen in 2011.
For instance, a one-bedroom unit at Jumeirah Village – one of the most searched for spots these days – can be rented for around Dh35,000, which was what it was in 2011 when it first made an appearance as a residential option. At the time, the Dubai property market was slowly emerging from the aftermath of the 2008-09 Global Financial Crisis. (Rents started shooting up from 2011 and reached their peak during 2014-15.)
In 2017, these one-bedroom units at JVC were carrying an average rental of Dh60,000.
At Discovery Gardens, it’s Dh37,500 for a typical one-bed, against the Dh38,000 a decade ago, according to the latest UAE real estate update from Asteco, which this week confirmed its acquisition by an Aldar Properties division. The rent was Dh65,000 in 2016 and Dh55,000 in 2017, according to the report.
in Dubai, 'Committed projects, particularly those at an advanced stage of construction, are expected to continue unabated," according to Asteco. "This is largely due to construction-linked and post-completion payment plans."
New project launches may pick up slightly but this is highly dependent on the speed of economic recovery.
Sharjah options
At some Sharjah neighbourhoods, the rental declines in Dubai – and the affordability it creates in Dubai – have been amplified. Rents in Sharjah are now at levels even below what they were in 2011.
According to Asteco, a one-bedroom units in the Al Nahda area of Sharjah is available for Dh23,500 against 2011’s average of Dh28,000. Corniche-based apartments start from Dh25,000, against the Dh28,000 or so a decade ago.
Even then, "As restrictions on movement have eased and a sense of normality returns, we expect relocations from Sharjah to Dubai to pick up again, particularly due to Dubai’s continuous increase in supply and decline in rental rates."
New homes, new pressures
Asteco’s estimates are that 34,500 new homes were delivered in 2020, of which nearly 25,000 were apartments. This is broadly in line with what other consultancies had come out with. It will keep the pressure on rents across most locations, more so if another 40,000 plus new homes are delivered this year.
Dubai landlords will be watching closely whether they can try and access more tenant traffic from Sharjah. “Contrary to previous years, when Sharjah recorded ample migration to neighbouring Dubai due to growing supply and reduced rental rates,” Asteco report notes. “Tenants opted to negotiate existing rental rates/lease terms or move locally, predominantly due to the COVID-19 lockdown restrictions.”
Awaiting the next upturn
"Whilst the downward trajectory in the real estate market for the short-term is unavoidable due to strained economic/market conditions and the expected supply glut, the medium and long-term outlook for the UAE is more encouraging," said John Stevens, Managing Director of Asteco. This will be "fuelled by recovering oil prices (a key export for the UAE), forecasted GDP growth, a pro-active government response and clear focus on economic progress and sustainability".
Source: Gulfnews.com
