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Residential rental growth in Dubai reached record highs in September, increasing 26.6% year-on-year (YoY), with prices in some areas now higher than their last peak.
Real estate firm CBRE said apartment prices grew by 26.7% YoY, while villa prices grew by 25.5% in the same period, but for the emirate as a whole, there is still some way to go before prices overall surpass their late 2014 peak.
The highest average yearly apartment and villa rental rates were in Palm Jumeirah, where average rents reached AED 231,397 ($63,008), and in Al Barari, where average rents reached AED 946,270 ($257,664)
“In the apartment and villa communities that we track, rents in 6.5% and 28.0% of these respective communities now sit above their last peak.
“Furthermore, rents in 22.6% of apartments communities and in 96.0% of villa communities, in September 2022, are higher than the same period five years earlier,” the company said in its latest Dubai Residential Market Snapshot.
“Given this, the rate of growth in certain typologies and neighbourhoods may start impact affordability in the city very significantly. This in turn may impact its competitiveness and lead a negative spill over into other sectors, particularly amidst a high cost of living and softer global economic backdrop.”
Sales prices still rising
The sale price overall rose by 8.9% (8% for apartments and 14.3% for villas), but they are still 23.8% and 21.6% below the late 2014 peak.
Jumeirah saw the highest price per square foot for apartments at AED 2,156, while the Palm Jumeirah had the highest sales price per square foot for villas at AED 3,597.
The highest month-on-month sales price change was in the Palm Jumeirah, where prices grew by 4.5%. Prices fell in seven of the 33 districts surveyed by CBRE, with Meydan City seeing prices decrease the most by 3.3%.
Rental prices rose the fastest MoM in Jumeirah Golf Estates, by 4.6%, but fell in eight districts, with Falcon City of Wonders rents falling fastest at 2%.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)
