Dubai rents to ease after handover of 72,000 homes this year

The National

2 days ago

The handover of more than 72,000 homes this year is expected to stabilise rents in Dubai, reducing pressure on tenants and offering them more choice, according to a new report by property portals Bayut and dubizzle.
The market is entering a phase of 'healthy stabilisation', with long-term rents showing more measured shifts and short-term rentals continuing to attract steady demand, the research found.
' Dubai's rental market is starting to stabilise after a period of rapid growth,' said Haider Ali Khan, chief executive of Bayut and Dubizzle Group Mena. 'With over 72,000 new units expected this year, the pressure on rents is slowly starting to ease, offering more breathing room and better choices for tenants.'
'With the rent-versus-buy debate picking up, especially now that prices are levelling out, we're seeing more people take a serious look at home ownership.
'The first-time homebuyer initiative launched by the Dubai Land Department is also nudging renters to consider making that leap, offering access to exclusive units and attractive financing.'
Dubai's property market has benefited from government initiatives such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE's economy on diversification efforts.
Under the first-time homebuyer initiative, purchasers will have priority access to new homes from participating developers as well as existing inventory. They will also benefit from discounts or limited-time offers on the price of off-plan units, flexible payment plans and improved mortgage options with better interest rates, faster approval times and reduced fees, according to the DLD.
Watch: What is Dubai's first-time home ownership scheme?
Apartment rents
Affordable apartment rents increased by 7 per cent in the first half of the year, but some units in Bur Dubai and Deira reported decreases of 6.19 per cent, the Bayut-dubizzle report found.
Mid-range apartment rentals experienced rises of 1 per cent to 6 per cent in annual rates.
Asking rents for luxury apartments decreased between 1 per cent and 5 per cent. However, some units in Dubai Marina and Downtown Dubai reported an increase of up to 3 per cent in annual rent.
Bur Dubai, Arjan and Deira are popular for affordable apartment rentals. Jumeirah Village Circle, Business Bay and Jumeirah Lakes Towers are sought-after for mid-tier units, while Dubai Marina, Downtown Dubai and Dubai Creek Harbour maintained their status as prime choices for luxury apartments, the study showed.
Villa rents
Affordable villa rents surged by up to 9 per cent in some districts. Asking rents for mid-tier villas have generally risen by up to 7 per cent. The exceptions are three and four-bedroom units in Al Furjan, and four and five-bedroom units in JVC, which recorded rent decreases of up to 13 per cent, according to the report.
Luxury villa rents surged by up to 53 per cent in the first six months of the year, with five-bedroom units in Dubai Hills Estate reporting the highest rises following the influx of new inventory.
'Continued demand and lack of extensive supply has meant that villa rentals have remained competitive for landlords,' the report said.
While Damac Hills 2, Mirdif and Dubai South were preferred for affordable villa rents, Al Furjan, JVC and Arabian Ranches 3 attracted the most tenant interest in the mid-tier segment. Dubai Hills Estate, Damac Hills and Jumeirah were top picks for luxury villa rentals, the report added.
A separate report by Springfield Properties showed that apartment rents in Dubai for the second quarter of this year increased to an average of Dh72,090 ($19,629) per annum, up from Dh66,725 in the corresponding period last year.
Townhouse rents on average also recorded healthy growth, rising to Dh165,783, while average villa rents increased to Dh263,373, compared to Dh224,879 a year ago, the real estate agency reported.
'The consistent rise in rental values, especially in prime communities, highlights the strong yield potential for property investors in Dubai. With growing tenant demand and attractive rental returns, the market remains a favourable environment for both short- and long-term investment strategies,' the report said.