Rents for apartments across Dubai have started to increase following months of persistent decline, as sentiment in the market continues to improve, according to a new report.
Asking rates for properties in Business Bay, Dubai Marina and Greens showed the highest average increase of 4 percent during the first three months of the year compared to the previous quarter, Asteco’s latest data showed.
The cost of renting apartments in Downtown Dubai also went up by 3 percent during the same period, while other areas like the Dubai International Financial Centre (DIFC), Palm Jumeirah, Sheikh Zayed Road, Jumeirah Beach Residence and Jumeirah Lakes Towers also went up by an average of 2 percent.
However, the rental market remains subdued when compared to the previous year, with annual rental declines averaging between 7 percent and 15 percent.
A few areas in Dubai have also seen continued declines in recent months, with properties in International City registering a 2 percent drop and Discovery Gardens posting a 1 percent fall in the first quarter of 2021 compared to three months earlier.
“Rental rate growth in Q1 2021 was nothing short of a mixed bag with positive and negative changes recorded on an inter (across) and intra (within) community level,” the report said.
“It should be noted, however, that Asteco recorded significant fluctuations across different developments and/ or buildings ranging from single-digit declines to double-digit increases.”
Property prices rise
Dubai’s market has been somewhat buoyed by demand from buyers who are looking to own a piece of property, particularly ready-to-occupy villas, as countries worldwide grapple with the coronavirus pandemic.
With the high demand, villa sales prices went up significantly during the first quarter of the year compared to a year ago.
Residential units in Jumeirah Park saw the biggest year-on-year price hike of 15 percent, followed by properties in Springs (13 percent), Meadows (9 percent) and Palm Jumeirah (8 percent).
"Indeed, it would appear that COVID-19 has proven the catalyst for the current rally," Asteco said.
However, the apartment market is still suffering a decline compared to last year, with sales prices across the city falling between 2 percent and 6 percent year on year.
When compared to the previous quarter, sales prices showed increases of between 3 percent and 5 percent.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
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