Property Rents In Dubai: Where They Rose And Fell In Q3 2022
Rental rates for apartments and villas increased by 4% and 5% in the third quarter, according to Houzon. According to the real estate company, villa rents in Dubai rose 22 percent annually and apartment rents in Dubai rose 15 percent. The result has been a rise in eviction notices and rental disputes as landlords take advantage of the current market conditions.
While many tenants utilize the RERA Rental Calculator to negotiate property rents in Dubai, others are ready to pay more than RERA’s Rental Rates in order to avoid a dispute and possible moving costs, which would lead to higher rents for new lease agreements, according to Houzon’s third-quarter analysis. There will be an oversupply of rental properties by year’s end and in 2023, which is expected to slow growth, the real estate company believes.
Since the pandemic-related headwinds hit Dubai’s economy, the property market’s rebound has accelerated. Based on preliminary data from the Dubai Statistics Centre, the emirate’s economy grew by 6.2% in 2021. Data from the Dubai government shows a 5.9 percent growth in Dubai’s gross domestic product in its first three months.
According to the Q3 2022 Market Report released by a leading real estate company based on data released by the Dubai Land Department, paying annual rent in Dubai with a single check is on the rise again in Dubai. Payments by one cheque have increased by 8% compared with last year. Most rent payments in Dubai are made with one check, which accounts for 32 percent of all transactions.
In contrast, according to Dubai’s leading broker, the total volume of transactions increased by 71% from January to September 2021 to January to September 2022. The rental rate grew by 25.3 percent annually and 7.8 percent quarterly, according to real estate experts. Dh141,000 ($38,393) was the average rent for two-bedroom villas, Dh210,400 rent for three-bedroom, and Dh278,500 for four-bedroom villas rental, the experts pointed out.
In Dubai, Where Have The Most Prices Risen?
Rent in prime areas of Dubai has also increased significantly as a result of the dramatic increases in prime sales prices.
Houzon reported an annual increase of 22 percent for rental apartments in Palm Jumeirah and 24 percent for rental properties in Downtown Dubai, respectively. Houzon also reported an increase in villas for rent in The Palm of 32 percent and Dubai Hills rental property of 33 percent.
As a result of an influx of ultra-high-net-worth individuals and the lack of prime housing supply, Dubai’s prime residential values have increased by 89 percent over the past year.
In Terms Of Unit Supply, What Is The Situation?
In the third quarter, Houzon estimated that 16,063 apartments had been completed and 3,471 villas had been completed. For the whole year, this represents 40% of preliminary estimates. In Dubai Production City, there were 235 units completed at Sol Apartments Dubai Production City, followed by Creek Views at Creek Beach Al Jadaf with 634 units.
According to Houzon, developers are looking to capitalize on the current buoyant conditions by resuming previously stalled projects. In the fourth quarter, Houzon expects developers to build a further 7,650 apartments and 1,000 villas.