Revealed: Areas in Dubai that saw the biggest drop in residential rents in 2019

Residential rents in Dubai continued to drop in the last quarter of 2019, with apartments posting a double digit year-on-year decrease in rates, a new report has found.

Average apartment rents in Dubai dropped by 13.4 per cent year-on-year in the last quarter of 2019, while villas/ townhouses registered a 9 per cent fall during the period, the report by property consultancy Cavendish Maxwell found.

“Tenants appear to have taken advantage of falling rentals and incentives from landlords, such as rent-free periods and multiple cheque payments, to upgrade to larger units and sought-after villa communities,” the report said.

“In areas such as The Meadows, prices declined at a faster pace than rents, improving the yields on properties for new buyers.”

In terms of property prices, average apartment rates declined by 15 per cent between Q4 2018 and Q4 2019, while the prices for and villas/townhouses dropped by 18 per cent.

“While supply remains the primary driver for price declines, some locations have started to show signs of stabilisation, and even recovery,” the report said.

“Softening prices spurred an increased number of property transactions in 2019, with November marking one of the strongest months in the past decade.”

The total number of transfers in Q4 stood at 12,444 for both apartments and villas/townhouses with off-plan transfers accounting for more than 60 per cent of the total.

Aditi Hariharan, associate partner, Strategic Consulting and Research at Cavendish Maxwell, said: “We step into the new year after a period of prolonged softness in prices and rents primarily driven by oversupply. However, tangible measures have now been taken to curb oversupply, including the formation of the Higher Committee for Real Estate Planning and developers holding back on new launches and focusing on projects under construction instead.

“While we will still see increased handovers as developers fulfill past commitments, most projects are expected to be completed in preparation for Expo 2020, which begins in October. Within the first half the year, we expect over 50,000 units of residential supply to enter the market as developers hand over projects delayed in 2019, which could exert downward pressure on prices. Further cues are awaited from the much-anticipated Expo and any further government policy changes.”

AREAS THAT SAW THE BIGGEST DROP IN RENTS IN 2019

For apartments in Dubai. Data as of November 2019

1. Business Bay

Annual drop in rents: 16.9%

Studio rents: Dhs54,840

One-bedroom rent: Dhs74,160

Two-bedroom rent: Dhs101,300

2. Jumeirah Lake Towers (JLT)

Annual drop in rents: 15.9%

Studio rents: Dhs42,250

One-bedroom rent: Dhs64,240

Two-bedroom rent: Dhs85,800

3. Dubai Marina

Annual drop in rents: 15.8%

Studio rents: Dhs54,040

One-bedroom rent: Dhs78,910

Two-bedroom rent: Dhs114,530

4. Motor City

Annual drop in rents: 15.4%

Studio rents: Dhs46,000

One-bedroom rent: Dhs53,170

Two-bedroom rent: Dhs88,475

5. Dubai International Financial Centre (DIFC)

Annual drop in rents: 14.4%

Studio rents: Dhs63,000

One-bedroom rent: Dhs86,925

Two-bedroom rent: Dhs134,125

5. Jumeirah Beach Residence (JBR)

Annual drop in rents: 14.4%

Studio rents: Dhs63,850

One-bedroom rent: Dhs82,440

Two-bedroom rent: Dhs110,610

7. Dubai Sports City

Annual drop in rents: 14%

Studio rents: Dhs38,500

One-bedroom rent: Dhs56,840

Two-bedroom rent: Dhs86,800

8. The Greens

Annual drop in rents: 12.3%

Studio rents: Dhs50,140

One-bedroom rent: Dhs59,250

Two-bedroom rent: Dhs91,000

9. The Views

Annual drop in rents: 12.2%

Studio rents: Dhs57,340

One-bedroom rent: Dhs75,225

Two-bedroom rent: Dhs100,100

10. Downtown Burj Khalifa

Annual drop in rents: 9.7%

Studio rents: Dhs63,450

One-bedroom rent: Dhs91,140

Two-bedroom rent: Dhs132,890

11. International City (Clusters)

Annual drop in rents: 9%

Studio rents: Dhs24,640

One-bedroom rent: Dhs34,930

Two-bedroom rent: Dhs50,940