Residential rents have been on the rise in almost all the areas of Dubai, barring Arjan, Bur Dubai and Liwan, with average rent increasing by over 13 per cent in March, the highest rate of growth recorded in over seven years.
Industry executives have attributed the increase in rents to an influx of foreign workers in Dubai as a large number of businesses are relocating here after the successful handling of the Covid-19 pandemic. This was evident in last week's data issued by the Dubai Statistics Centre, which showed the Emirates’ population crossing 3.5 million.
According to CBRE’s first-quarter report, average apartment and villa rent increased by 11.7 per cent and 22.5 per cent, reaching Dh80,000 and Dh238,441 per annum, respectively, in March 2022.
The costliest annual apartment and villa rents, respectively, were found in Palm Jumeirah, where asking rents on average were Dh197,482 and in Al Barari, where asking rents on average were Dh801,940.
Where apartment rents are rising faster
| Area | % Rent Rise |
| Business Bay | 4.9% |
| International City | 4.2% |
| Dubai Marina | 4.1% |
| Damac Hills | 4.1% |
| Palm Jumeirah | 3.9% |
| The Old Town | 4.0% |
| JBR | 3.5% |
| Downtown Dubai | 3.3% |
| Sports City | 3.2% |
| Jumeirah | 3.1% |
Where apartment rents are falling
| Area | % Rent Drop |
| Liwan | -0.9% |
| Bur Dubai | -0.6% |
| Arjan | -0.4% |
Where villa rents are rising
| Area | % Rent Rise |
| Jumeirah | 4.8% |
| Sustainable City | 4.8% |
| Emirates Hills | 4.7% |
| Arabian Ranches | 4.5% |
| Damac Hills | 4.5% |
Where villa rents are falling in Dubai
| Area | % Rent Drop |
| Deira | -1.9% |
| Jumeirah Park | -1.6% |
| Reem | -1.2% |
| Al Furjan | -0.4% |
Source: CBRE, KT Research
The real estate consultancy’s report showed that Business Bay is seeing the biggest increase in rentals at 4.9 per cent in the apartment segment followed by International City at 4.2 per cent, Dubai Marina and Damac Hills (Akoya) at 4.1 per cent and The Old Town (Bastakiya) at 3.9 per cent. While the five areas that are witnessing the smallest increase in rentals include Dubailand Residence Complex, Green Community (DIP), The Views, Dubai Silicon Oasis and The Greens.
In the apartment segment, Arjan, Bur Dubai and Liwan saw rentals shrinking while in the villa segment rents declined in Jumeirah Park, Deira, Reem and Al Furjan.
Samir Munshi, chairman of Silver Heights Holding, said rents in the mid-market and affordable segments will continue to appreciate by around 20 per cent. However, in the luxury segment, the market will consolidate as rents have already peaked over the last 18 months.
“We have to now factor in a few facts: First, the end of Expo 2020 means a lot of Expo-related demand has ended. The Covid-19 situation has improved globally. So the travel restrictions globally have eased. So, while a lot of people will be entering the country to take up new jobs or set up businesses, a lot of people are also going out. That’s why, the luxury real estate market will consolidate, but demand will accelerate in the mid-market,”
said Munshi, a real estate industry veteran who has been involved in real estate brokerage, investment and development.
Imran Farooq, CEO of Samana Developers, said demand for residential units for rent has been very strong and will continue to remain high throughout the year because free zones and licensing authorities have seen exceptional growth in terms of issuance of new licences which resulted in an influx of foreign workers into the Emirates.
“With such a huge number of new trade licences being issued in the emirate of Dubai, this clearly proves that large businesses are relocating to Dubai after Covid, and this will continue to bring in more and new residents to Dubai,”
added Farooq.
As a result of the inflow of new businesses, he said demand for offices for rents has also been pretty strong over the past three months.
“A-grade office rent has gone up by 30-40 per cent which means more demand being created by businesses relocating to Dubai. Originally, demand increase started with villas and townhouses, but now all the sectors have shown a very strong trend,”
added Farooq.
News Source: Khaleej Times
