It Is For The First Time In Three Years That The Lease Rates Of Villas Have Risen In DubaiThursday, May 17, 2012
It is the first time in three years when villa rental prices have met inclination in Dubai, agreed by the leading global real estate consulting firms.
The report depicts villa market has found its way to plenty good place for the first time after 2008/ 2009 with average increased lease rate of 3% every quarter. Two bedroom sector met the tallest growth rate of 5% whereas five and six bedroom units achieved 3% (median value). Positive growth has been seen and will continue to be in 2012, according to the report, in established community environments that offer high calibre of amenities to modern livings. Especially, Palm Jumeirah and Emirates Living have been standing at the top of the chart with unceasing growth for the last three quarters.
The report reveals that Emirates Living has been possessing 6% lease rate year after year for two bedroom villas in the Springs area. For instance, the rate of villa ranged from Dhs70, 000 to Dhs85,000 per unit/ annum in the first quarter of 2011 and today’s market values it from Dhs85,000 to Dhs100,000 per unit/ annum according to its standard and location.
If we talk about apartments then the ones with single bedroom have taken the market in initial quarter with 2% growth rate, meanwhile, three bedroom units achieved 1% growth rate. The highest increase in rates was found to be 7% and 6% in the Greens and Downtown respectively. Although prime areas are observing higher rental rates, there are also many of the up-line locations such as Dubai Sports City, Dubai Silicon Oasis, International Media Production Zone, Jumeirah Village and Dubai Investment Park bearing deflationary pressures on occupancy and lease rates due to recent uprising deficiency in providing facilities and properly designed infrastructure.
Dubai Sports City does not leave the ground with same old rates – Dhs 30k to 36k and Dhs 40k to 55k per annum for one and two bedroom units. The report shows that apartment lease rate has descended to 7% in such emerging locations.
Forward looking real estate consultants betoken that area-specific growth will take place in residential sector in terms of occupancy rate, sales and lease rate as pipeline supply has become rare in developed locations. Arabian Ranches, Emirates Living and Palm Jumeirah are expected to have the share in market during 2012 with limited inventory.
Many industry analysts are proclaiming almost same findings. First quarter report by a reliable real estate consultancy shows off that apartment and villa rental rates in the Emirate grew 1% in first quarter of the year. The rates for Downtown, Jumeirah Beach Residence and Jumeirah Lakes Towers rose up to 5%, 4% and 3% respectively.
As per reports Green community and Meadows reached 3% whereas Arabian Ranches got 2% increment. The international investment agencies are of the same view for selective areas of Dubai.
The rate of depreciation in rents has gradually deviated and converted to selective increases in the areas of higher standard. It is expected to be capped in the short term due to moving-down rent rates in the outskirts – according to sources.
On another note, on the basis of calculations, the market of Dubai is 20% oversupplied in the present scene. 67 thousand vacant units are the aftermath of this excess supply and a further addition is expected upto 20 thousand units in 2012 – causing around 6% increase in the stock.