Experts have predicted further declines in real estate prices this year
Tenants in Dubai are in a good negotiating position following a downward trend in rents as a result of immense supplies that came in last year – a trend, which real estate experts predict to be stronger as new supplies come this year.
According to Property Finder’s latest trends report, the advertised rental asking prices for Dubai apartments have dropped almost 30 per cent in the past two years, which is more than half of that in 2018. Villa rents have dropped around 22 per cent over the same period, with an 11 per cent drop in 2018.
More and more families are taking advantage of the current market situation to relocate from an apartment and upgrade to a villa with more space and a garden. It’s no longer a case of where one can find a suitable property, but deciding which to choose, said Lukman Hajje, chief commercial officer of UAE real estate portal Property Finder.
This year, there will be an increase in affordable rents, particularly for town houses and small villas, even as capital values and rents soften at a slower rate, according to a 2019 outlook from real estate consultancy ValuStrat.
The second half of 2018 saw the biggest declines in advertised rents in the Green Community (down 9.3 per cent), Jumeirah Lakes Towers (8.7 per cent), and DIFC (7.5 per cent), according to Property Finder. For villas, the biggest rent declines were in Damac Hills (down 19.3 per cent), Victory Heights (16.2 per cent) and Dubai Silicon Oasis (8.3 per cent).
However, locations such as The Lakes, Arabian Ranches and Arabian Ranches 2 bucked the trend, where median advertised rents increased by 3.7 per cent, 2.2 per cent and 1.5 per cent, respectively.
According to the Property Finder report, apartment rents were the lowest at International City which has a median advertised annual rent of Dh32,998 (£6,825), while City Walk was at the other end of rental figures, with a median of Dh189,674 (£39,235) per year.
The median asking price for an apartment for rent is highest for Dubai in the UAE, followed by Abu Dhabi, Sharjah or Ras al Khaimah and Ajman. The figures for a year for Dubai is now Dh80,000 (£16,550), while it is Dh71,000 (£14,688) in Abu Dhabi, Dh38,000 (£7,861) in Sharjah or Ras al Khaimah and Dh26,000 (£5,380) in Ajman.
Buyers are also in a better position. There was a substantial jump in residential sales transactions in Dubai in the last quarter of 2018, with off-plan sales volumes up 47.9 per cent and ready sales up 24.8 per cent from the previous quarter, the ValuStrat Dubai Real Estate Review report said.
2019 is expected to continue this trend with affordable options for buyers, said Haider Tuaima, head of real estate research for ValuStrat.
More than 47,500 apartments, villas and town houses are set to be completed this year, based on figures from Dubai Pulse, the open-data platform initiative from the Smart Dubai office, and compiled by Property Finder. That is 40 per cent more than last year’s total residential supply of 28,890 units.
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