Rents across Dubai have risen during the first quarter this year as the REIDIN general rent index grew seven per cent from Q4 2013 and by 23 per cent from Q1 2013, according to a report by property consultants JLL.
Leasing rates in the emirate’s secondary locations continued to rise during Q1 2014, JLL added.
Sports City recorded the largest rise in rents as rates grew by 41 per cent followed by International City and Discovery Gardens, which saw increases of 35 per cent and 33 per cent respectively.
Prime locations such as Downtown and Marina saw rents rising by 24 per cent and 21 per cent respectively.
Residential property prices in Dubai have also risen by 30 per cent year-on-year as of February with apartments outperforming villas in the market, the report said.
The apartment sales price index rose 33 per cent year-on-year while the villa sales price index increased by 20 per cent.
Though prices for most locations remained shy of their 2008 peaks, some areas have recorded peak levels, the report said.
JLL predicted that Dubai’s house prices are expected to rise further in 2014 but at a slower pace.
The growth in rents and sales prices in established communities are likely to prompt tenants to relocate to more affordable areas within Dubai and to the neighbouring northern emirates, the report said.
Dubai’s property market will also continue to see tighter regulations against speculation and to prevent a bubble, according to JLL.
“These efforts are expected to continue into 2014 as similarities are drawn between today’s market and the speculative activity witnessed in 2008,” the report said.
Dubai residential market is also poised to see a rise in supply of residential units.
Around 1,800 residential units, most of which were apartments, were handed over in Q1 2014, as per the report. An additional 24,000 housing units are expected to be delivered through out 2014 while another 39,000 units will be supplied over the next two years in Dubai.
Despite a large rise in supply, JLL noted that there is a shortage of middle income housing in the Dubai market and predicted a rising demand for such accommodations over the next few years.