New residency and visa policy reforms are among the top reasons for the increase in demand.
Dubai resident N.A. has just been given an annual rent increase notification of Dh14,000. The expat, who has been staying at the same three-bedroom apartment in the Zaabeel area for the last 10 years, said her annual rent increased from Dh70,000 to Dh84,000. That’s more than Dh1,100 a month and marks a 20 per cent higher rent than last year.
N.A.’s notification is in line with the average increase across Dubai, as rents hit a historic high of nearly 27 per cent last year.
Real estate marketplace Property Finder said that the average rental prices for apartment contracts witnessed around 21 per cent increase, compared to 2021, while those for villas increased by 37 per cent.
Where rents have increased
Sarah Hewerdine, head of marketing at agency-owned real estate website Houza, said for those living in communities such as Dubai Hills,
“a 20 per cent increase is expected due to the price growth we have seen here”.
“At The Views and The Greens, where occupancy is one of the highest across Dubai, rent increases are averaging 10-15 per cent,”
Property Finder’s recent data suggests that the average rental price for apartments in Dubai Marina increased by 31 per cent, while Jumeirah Lake Towers units registered a 16 per cent rise.
“On the other hand, the average rental cost for villas in Jumeirah Village Circle picked up by 17 per cent, while in Palm Jumeirah, it rose by 30 per cent in 2022.”
This spike in rent is supported by high demand across Jumeirah, Dubai Hills Estate, Arabian Ranches and Mohammed bin Rashid City.
“People were more inclined to renting properties that were nestled within the realms of exclusive communities, offering a wide range of amenities, as well as connectivity to various parts of the city.”
Most affordable areas for rent
According to Hewerdine, when looking for a 2-bed apartment in Dubai on houza.com, the most affordable options include Al Qusais for an average of Dh30,000; Ras Al Khor for Dh40,000, International City for Dh50,000 and Dubai South for Dh55,000.
“In the apartment market, you can definitely find cheaper options in key communities such as JLT, but be prepared - they will be located within older buildings.”
When it comes to a 4-bed villa, one of the most affordable areas to rent in is Dubai South: At Dh110,000. Villas in Mirdif are up for Dh130,000.
Value for money
Hewerdine said tenants could find good value for money within communities such as JVC and JVT.
“At current rates, you can secure a 2-bed apartment for around Dh65,000."
“The Gardens and Discovery Gardens offer some really attractive options for tenants with great connectivity and transport links. In the Gardens, you can expect to get a 2-bed apartment in a high-grade building for Dh80,000.”
Property Finder suggested these areas for the most value-for-money rental units: Dubai Marina, Mohammed Bin Rashid City, Jumeirah Village Triangle, Al Khail Heights and Dubai Harbour.
Why have rents increased
New residency and visa policies are among the top reasons for the increase in demand. A significantly-expanded Golden Visa scheme and a new five-year Green residency are among the several residency reforms that went into effect last year.
Property Finder listed other reasons for the record increase: A rising demand for luxury property, increased foreign investment, economic diversification and prestigious events
“attracting huge amounts of global talent and interest in living in the UAE.”
“The variation in rents has also led to the pick in demand across new residential areas, which is a positive change for the UAE’s growing property sector.”
News Source: Khaleej Times