Dubai rents ‘plummeting'
Residential property rents in Dubai are continuing to plummet, according to the latest real estate report to be published but there are signs of some stabilisation...
Commerical rents are also falling and are set to tumble further as new office space comes onto the market in the next 18 months, another report warns.
Rents in the Dubai residential property sector fell up to 30per cent in August, the report from Landmark Advisory reveals. Worst hit were two bedroom apartments in Palm Jumeirah and in International City where rents fell 23per cent. Other key developments such as Discovery Gardens, JLT and JBR have now seen rents fall by between 10 to 30per cent since March.
The report says that although rents in many areas of Dubai have decreased significantly over the past five months there are exceptions to this trend with some unit types in preferred developments performing well.
For example, good quality one bedroom apartments in Dubai Marina have increased by 11per cent while two bedroom apartments have gone up by 6per cent. Also three and four bedroom villas on Palm Jumeirah have returned to March 2009 rents or increased marginally, Landmark's analysis shows.
Charles Neil, CEO of Landmark Advisory said those developments with rising rents are benefitting from a lack of supply. ,Many landlords have removed inventory from the market to avoid renting out at current market rates while others may be out of town during the summer period and consequently unavailable,' he explained.
He also said that demand for property was particularly strong during June and July due to a significant amount of rental contracts ending around this time. But overall these marginal rent increases are unsustainable.
Landmark predicted that most residential areas in Dubai will be subject to further fluctuation, especially as new supply comes onto the market in the next 12 to 24 months.
Meanwhile average commercial rents are set to tumble further with some 25 million square feet of additional office space forecast to enter the market by the end of 2011, according to Jones Lang Lasalle.
The property advisor said office rents across Dubai fell by 25per cent in the second quarter, but the decline is falling compared to the 45per cent fall in the first quarter. Rents for Grade A space, excluding DIFC, now average at AED225 per square foot, in line with levels seen in mid 2007. This now made prime Dubai offices cheaper than those in London, Paris, Hong Kong, Mumbai and Moscow, the firm said.
Source: www.propertywire.com