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Dubai’s rental market continued to heat up over the summer, with prices rising by 19% in the second quarter of 2023, compared to the same period last year.
The increase was more significant for one- and three-bedroom apartments, which saw rental hikes of 20.5% and 22.2%, respectively, Property Finder’s Market Watch Q2 2023 data revealed.
The residential community of Jumeirah Lakes Towers (JLT) witnessed the highest average rent price increase on two-bedroom apartments at 33%, rising to AED 120,000 in Q2 2023 from AED 90,000 over the same period last year.
According to the real estate search portal, Dubai Marina, Downtown Dubai and Business Bay remained the preferred communities for apartment rentals in Q2 2023 despite reporting price hikes.
The rent for a three-bedroom apartment in Dubai Marina averaged AED 240,000 in the third quarter of this year, rising from AED 200,000 in Q2 2022. Similarly, Downtown Dubai saw rents spike to AED 370,000 for a three-bedroom space, compared to AED 300,000 the previous year.
Tenants prefer to own a home
Villas also experienced a surge in rents, with average rentals in Dubai increasing by 25.5% in the second quarter compared to Q2 2022, according to Property Finder's asking price data.
The average rental price for a three-bedroom villa rose by 30%, while four-bedroom villas experienced a 35.1% hike.
Communities such as a Dubai Hills Estate, Damac Hills 2, Al Barsha, Jumeirah and Damac Hills emerged as the top choices among renters searching for villas.
Rental contracts in Q2 2023 also saw a year-on-year increase of 6%, registering 131,293 contracts compared to 123,856 contracts in Q2 2022. Tenants chose to own a home instead of renting, driven by the surge in average market value for renting.
The data also revealed a rise in off-plan transactions and sustained momentum in sales of existing properties, complemented by growth in value across Dubai and Abu Dhabi.
In Dubai, the market value for sales transactions recorded the highest ever gains for a quarter, reaching AED 90.75 billion compared to AED 58.96 billion in Q2 2022. The market value increased by 53.93% compared to Q2 2022, contributing to a steady demand for housing and strong economic growth.
Off-plan sales values also witnessed a record by reaching AED 35.06 billion transactions in Q2 2023 compared to AED 18.34 billion in Q2 2022, recording a 91.18% increase. Ready sales transactions values hit a new high of AED 55.7 bln in comparison to AED 40.6 bln Q2 2022, marking an increase of 37.11%.
Abu Dhabi also recorded a similar momentum with off-plan sales transaction value in Abu Dhabi for Q2 2023 contributed to 71.9% of the total sales transactions value compared to 58.7% in Q2 2022 by reaching AED 4.704 bln compared to AED 2.157 bln.
However, the average rental prices in Abu Dhabi in Q2 2023 decreased by 1.3% compared to Q2 2022, with only Khalifa City and Al Khalidiya experiencing a rise in average rent prices for in-demand areas.
(Writing by Bindu Rai, editing by Seban Scaria)
