Residential rents in Dubai continued their low single-digit declines in the third quarter of the year, according to a new report issued by research agency JLL.
Numerous residential buildings even within the prime areas such as Downtown and Marina are seeing increased vacancies, it stated, citing anecdotal evidence.
Hence tenants have been able to renegotiate their rents downwards by an average of 5 per cent to 7 per cent.
Meanwhile sales prices for both villas and apartments remained largely stable over the quarter, it found.
“Direct sales of UAE properties were allowed at Cityscape for the first time in 10 years and this peaked the interest of potential buyers by allowing them to compare between the various launch offers across a variety of properties,” the report said.
In terms of supply, the majority of completions during the third quarter were apartments with 3,300 units delivered.
Villas and townhouses contributed 660 and 75 units respectively.
The largest completions were Duja Tower in Trade Centre First, adding 679 units and The Polo Residence in Meydan with 598 units. District 1 and Lila in Arabian Ranches 2 contributed 267 and 219 units respectively.
Overall, the report also stated that the total value of transactions of existing residential properties (excluding land) has also increased over 2017, with sales in the year to August exceeding Dhs3.7bn, up by 28 per cent compared to Dhs10.7bn during the same period last year.
“This is supported by continued strong investor demand from countries like India and Pakistan,” it said.
Sales worth Dhs2.7bn of existing residential units was recorded in the month of August alone, with 20 per cent of the amount coming from Dubai Marina and 20 per cent from the Business Bay / Burj Khalifa area.
According to reports, construction activity across Dubai is set to increase further over the next two years, with approximately Dhs350bn worth of contracts likely to be awarded prior to Expo 2020.
“Developers in Dubai have been particularly active in the residential sector with JLL data suggesting up to 80,000 units could be delivered before the end of 2019, although actual deliveries are likely to be below this level, the report added.