Apartment rents drop 3 percent in Q1 2016
Residential apartment rents are three percent down in the first quarter of 2016 compared to the first quarter of 2015, according to real estate portal Bayut.
But a comparison done on a quarter-on-quarter basis by the portal reveals a different picture, showing average rentals had increased three percent with apartment rental yields remaining at 6 percent.
Studio apartment rents adjusted five percent with average annual rents being Dh60,000. One- and two-bed apartments both adjusted 4 percent with average rents being Dh98,000 and Dh154,000 per annum (pa), respectively. The 3- and 4-bed categories corrected by 4 percent and 3 percent, respectively, fetching Dh210,000 and Dh321,000 pa.
Almost 4,600 residential units were reported to be completed in the first quarter of 2016 and 10 percent of them came from projects delayed in 2015. Majority of these were located in Jumeirah Village Circle, Mohammed bin Rashid City, and Dubailand.
The top five localities for renting apartments during the period were Dubai Marina, Jumeirah Lake Towers, Bur Dubai, Downtown Dubai, and Business Bay.
The report said Dubai’s real estate market sailed stably through the first quarter.
“Not only did we see real estate developers carefully considering demand before supplying the market with new units, but we also saw an even distribution and movement of residents from the city center to suburbs,” it added.
Property consultancy JLL reported nearly 2,200 units were added to the Dubai residential market in the first quarter 2016 alone with rents dipping during the period compared to fourth quarter 2015.
The first quarter 2016 report revealed that rents for apartments were down by three percent quarter-on-quarter for apartments and one percent for villas. On the year-on-year (y-o-y) basis, the decline has been five percent for both the categories.
On the price front, it said the residential market was approaching the ‘bottom of its cycle,’ stating prices were down 10 percent year-on-year.