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Apartment and villa rents across Dubai have either dropped or remained unchanged in most locations over the last quarter, according to a new report.
Overall, leasing rates for flats across Dubai posted zero average increase during the first quarter of the year compared to the previous three months, Asteco said in a report on Wednesday. Compared to a year ago, overall rents increased by around 10%.
Within the segment, the majority of locations, including Downtown Dubai, Sheikh Zayed Road, Business Bay, Dubai Marina, Jumeirah Beach Residence, The Greens, The Views, Dubai Sports City and International City posted declines of 1% to 3% in rents in the first quarter of 2024 compared to the last three months of 2023.
For villa properties, rental rates dropped by 1% since the fourth quarter of 2023 and increased by 6% from a year earlier.
Half of the locations tracked for the study, including Arabian Ranches, Jumeirah/Umm Suqeim, Jumeirah Park, Mirdif, Palm Jumeirah and Town Square, saw rental declines of 1% to 3% on a quarterly basis, while the rest of the communities, except Dubai Hills Estate, did not post any rental changes.
Moving forward, the real estate consultancy firm said it expects an increase in the number of tenants transferring to other properties, partly due to the “gradual easing of upward rental movement.”
However, it anticipates that the updated RERA rental calculator could lead to potential increases in existing rates, although there will be more supply expected to enter the market, which will be partly due to existing tenants acquiring their own homes.
“In general, rental rate growth has proven a mixed bag over the last three months. While average apartment and villa rental rates have more or less remained unchanged, rental rate growth has varied across different communities,” the report said.
“Annually, growth rates have slowed to single digits, with villas at 6% and apartments close to that at 10%.”
(Writing by Cleofe Maceda; editing by Seban Scaria) seban.scaria@lseg.com