Rents in Dubai continue to plunge as more tenants vacate homes

Numerous residents are downsizing, others are repatriating to home countries: Asteco

  
Aerial view of urban skyline and skyscrapers in Dubai UAE. Image used for illustrative purpose

Aerial view of urban skyline and skyscrapers in Dubai UAE. Image used for illustrative purpose

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Residential rents in Dubai continue to decline, as more tenants move out of their homes amid the challenges resulting from the coronavirus pandemic, according to a new report.

Tenant movement increased significantly during the third quarter of the year, with residents either downsizing, leaving the UAE or sending their dependent families back to their home countries, property consultancy Asteco said.

Video: Dubai rents continue to fall due to ongoing COVID-19 impact

From July to September, villa rents fell by 2 percent over the previous quarter and 9 percent compared with the same period last year. The decline in apartment rents was more pronounced, recording quarterly and annual decreases of 4 percent and 13 percent, respectively.

“While numerous residents are downsizing in terms of unit sizes, quality specification and/ or location, others are repatriating to their home countries or sending their extended family back due to job losses, salary cuts and/ or simply as a pre-emptive measure given current uncertainties and risks,” the firm said.

However, Asteco noted that many tenants are also looking to upgrade to larger apartments or villas. Tenants who are looking to move out are particularly interested in units with a separate office space, usable outdoor space like larger balconies and gardens, additional storage and more building/ community amenities. Properties that are within walking distance to retail and leisure facilities are gaining more interest as well.

Developments that are outside the commercial hubs are also attracting higher tenant interest.

“The new, and most likely to stay, culture of remote working reduces the need to live close to central business districts, which means areas previously considered secondary locations have recorded an increase in demand,” said Asteco.

“Not only do these developments represent good value for money, the majority are self-sustained communities with ample retail, leisure and landscaping,” the company added.

Where apartment rents have fallen

Apartment rents dropped the most in Dubai Sports City, which registered a decline of 17 percent, followed by Business Bay (16 percent) and Jumeirah Village and Downtown Dubai, which both registered a 14 percent decline.

Apartments in Dubai Marina, Jumeirah Beach Residence and Deira recorded 13 percent rental declines, while those in the Greens, Jumeirah Lakes Towers and Discovery Gardens fell by 12 percent.

In International City and areas along Shaikh Zayed road, apartments were cheaper by 11 percent in the third quarter compared to a year earlier, while flats in the Dubai International Financial Centre (DIFC) and Palm Jumeirah posted the lowest declines, at 10 percent and 9 percent, respectively.

The first nine months of the year saw 16,350 new apartments and 6,700 new villas completed in Dubai. An additional 6,250 flats and 2,200 villas are expected to be delivered during the fourth quarter of the year, bringing the new residential stock for the year to a total of 31,500 units.

(Reporting by Cleofe Maceda; editing by Seban Scaria)

Cleofe.maceda@refinitiv.com

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