Dubai Rents Up 2% In Q2 - CBREThursday, July 26, 2012
According to second quarter report about Dubai real estate performance revealed that average apartment rents in Dubai have increased two percent but in posh communities such as Emirates Living and in Downtown Dubai, rents are increasing five to eight percent.
As compared to well-located communities, new residential communities are facing downward pressure with rental rates declining for instance. Rental rates remained unchanged in a few areas like Dubai Sports City, Motor City and Business Bay.
Villas rental rates also increased by two percent and increased up to five percent during the first half of 2012. The cost of renting a villa remained the same throughout the year. New villa developments are in pipeline that will be delivered in the coming few months but it is said that they will not have any significant impact on rental and occupancy rates. However, new villas may be offered at competitive rates.
Dubai real estate market is slowly and steadily recovering. Residential property prices remain steady as compared to commercial property that remained weak amid new supply. Landlords of older properties are likely o struggle to maintain the existing lease and occupancy rates.
A limited number of well-located offices are likely to see a limited upturn in rents in the medium term. Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee, said that Dubai will aim for 4 to 5 percent growth this year as compared to 2011. The number of real estate transactions is also increased up to 15 percent in the second quarter with the total value reaching AED 7.1 billion.
According to experts, the regional market is expected to maintain its positive journey ahead during the rest of year. Transaction volumes may be constrained in the third quarter due to the month of Ramadan.
Prime office lease rates are expected to remain stable till the end of year 2012 and offices in DIFC will show further signs of a two-tier market. DIFC market is observed to build downward pressure on lease and occupancy rates, due to influx of strata owned space by private developers.