Dubai rental market saw a strong recovery last year as the economy improved with a successful vaccination programme and gradual opening of international borders, experts say.
According to the latest report released by real estate consultancy ValuStrat, analysts and industry specialists said market sentiments are expected to pick up further this year. They said rents for residential and commercial properties would continue to rise in 2022 but with a slower pace.
The report stated,
“2021 was a year of recovery from pandemic challenges and a beginning of the new normal. Prices and rents mostly recovered to pre-pandemic levels record-breaking sales volumes and values,”
Haider Tuaima, head of Real Estate Research at ValuStrat, said the ValuStrat Price Index (VPI) for Dubai’s rental values registered 67.3 points last year, up 6.7 per cent quarterly and 18.9 per cent annually. However, average rents are still 4.9 per cent lower than when the Covid-19 pandemic began. He said the weighted average annual rent for apartments as of the fourth quarter of 2021 was Dh58,,707 and for villas was Dh236,650.
“No doubt villas performed better than apartments as far as rents are concerned. Villas up 26.8 per cent year-on-year basis and 6.3 per cent quarter-on-quarter basis while apartments’ rents grew 14.3 per cent year-on-year basis and 6.9 per cent quarter-on-quarter basis,”
In reply to how Dubai’s rental market performed in 2021 compared to 2020 and 2019, Tuaima said the VPI registered 70.8 points in the fourth quarter of 2019 compared to 56.6 points in the same quarter last year, reflecting a decrease of 20 per cent.
Ata Shobeiry, chief executive at Dubai-based real estate portal Zoom Property, said rental market staged a strong recovery due to efficient policy measures taken by the government.
“Expo 2020, the return of foreign investors and efficient handling of the pandemic are some of the major reasons that led to the strong recovery in the rental market,”
Outlook for 2022
The ValuStrat report said the outlook for 2022 is cautiously optimistic due to local and global pandemic dynamics and over-supply fears. However, the report alerted about downside risks and said the overnight might reintroduce movement restrictions due to the spread of the Omicron variant of the Covid-19 virus.
Generally, prices and rents are expected to a slower pace, though some highly desired prime locations are expected to see capital values reach their past 2014 peaks, the report said.
“Generally rents are expected to rise moderately during. However ever, prime located properties where demand is high may continue to a see double-digit increase,”
Nikita Kuznetsov, CEO, Metropolitan Premium Properties, said the rents will be increasing in Dubai this year but at a slower pace.
“We believe 2022 will see rental prices continue their northward trajectory, but the rate of increase will be slower than in 2021,” “We expect villas will continue to be in high demand and, as a result, rental price increase for villas will be higher than apartments. On average, we can expect to see a five per cent to seven per cent increase in rental prices for apartments and seven to 10 per cent for villas,”
He said popular locations for apartments would include Port De La Mer, Emaar Beachfront as well as Dubai Creek. At the same time, while for villas, there will be a strong interest for the Tilal Al Ghaf project as well as Amalfi estates upon completion.
News Source: Khaleej Times