Tenants in Dubai have been subjected to many price changes in the rental market over the last few years, which has led to people seeking more affordable housing as the prices climb. However, now we can safely say that the market is softening a little due to this continuing flight of affordability, offering tenants an opportunity to recuperate after several tough years of high rent.
New research shows that the more upmarket areas of U.A.E. saw the largest decline in rental prices in second quarter of 2015, with Palm Jumeirah and JBR suffering the most at a 7 and 6 per cent decline respectively.
Dubai Marina, JLT, and the Greens also saw a decline of 2 to 4 per cent in their rents, whereas the rent recorded in more affordable areas, like IMPZ, Dubai Sports City, and Dubai Silicon Oasis, were higher than 2014. This was due to the completion of community infrastructure and increased occupancy levels, making them popular mid-residential areas.
Rent in Old Dubai areas remained unchanged according to reports issued last Tuesday, however rentals within the villa market saw a steeper decline, falling by an average of 3 percent in comparison to the average 2 per cent for apartments across the city.
The decrease was felt throughout the market and areas with a significant amount of completed new supply were the most affected. In the villa segment, the handover of developments like Casa at Arabian Ranches brought the rental rates for the area down by 7 per cent quarter-on-quarter and 15 per cent year on year.
With many more units due to be handed over, the 2 per cent quarter-on-quarter decline is not going to be a temporary blip, further pressuring owners to review their rental price and payment terms still to come.