Dubai Dwellers trying hard for Settling down House Rent Rates
Rent rates of apartments in Dubai dropped 3% in the first 4 months of 2017, and 8% annually, as per the real estate constants. Palm Jumeirah’s high-end properties were most affected noticing 7% of the decrease in rent and 14% annually. In DIFC, there was no reduction in quarterly rates however annually it dropped to 9%. Mid-market apartments are following this decline of 3 and 12% in Business Bay and 2 & 4% in Jumeirah Lake Towers. The only area to witness an increase in a cheap sector with an annual rise of 3% is Discovery Gardens.
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New supplies and tenants together are taking advantage of competitive rates which resulted in landlords giving flexible terms and condition by increasing the amount of cheques or giving rent-free periods. This has been amalgamated with the 3,600 apartments in the first quarter which is estimated to top 17,000 thereby putting more pressure on the rents.
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Tenants have become budget-conscious, taking benefit of the additional supply and competitive rates to relocate to new properties or settling down for existing contracts. For the rents on villas, ongoing trend is the same like apartments with a decline of 3% per quarter and 8% annually. Tenants are taking advantage of the rising availability of competitively rated properties.
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Rents will further decline as 4,000 villas are due to get finished by the end of this year, which will be rented below the already existing rates to improve take up. Over 650 villas were released in the first quarter this year.
In many communities, the sales prices are fluctuating and not stable. They aren’t expected to stabilize until the rents are reduced, which are not likely to happen until late this year or early next year. Communities having amenities, infrastructure and restricted future supply potential have recorded marginal increases in the sale prices. The sale prices of the villa in the Meadows and The Springs rose up to 8% from 5% from first quarter of 2016.
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The apartments saw a decline across the board from a sales perspective, although the upper end of the market felt the impact with Downtown and Dubai Marina witnessing per year decrease of 7%. The villa got along well than some of the established communities with good transport links and within proximity to media city and also with those having good amenities like shops & restaurant and felt increased demands resulted in price growth.