Renters in Dubai will continue to incur higher rates on new contracts. But according to industry experts, increases on contract renewals will be limited by the Real Estate Regulatory Authority (RERA) amid increased demand for apartments and villas in the second half of 2022.
Rents continued to rise by double digits in the first half, according to analysts and executives, as landlords raised rates in response to growing demand and a scarcity of current housing stock, particularly in popular villa communities. They anticipate that rental rates will stay high in the second half of the year, but that rental growth will finally start dropping.
A recent Savills report came to the same conclusion. Savills highlights here that rent in Dubai has seen an average of a 25% increase year-on-year. Annual growth rate in Dubai’s rents sits at an average of 25%.
KEY CONTRIBUTORS TO GROWTH IN DUBAI RENTS:
RELOCATION OF INVESTORS AND HNWI’S
According to Ata Shobeiry, chief executive of Zoom Property, the Dubai rental market has experienced an annual growth rate of approximately 21% to 22% for apartments and villas. This is very close to the 25% year-on-year increase highlighted by Saviils, meaning it is likely an accurate representation.
Mr Shobeiry, places significant emphasis on High-Net-Worth Individuals (HNWI’s) and investors taking up Dubai as their primary place of residence as being key contributors to this increase.
POPULAR RENTAL AREAS
Also, Mr Shoberiy, highlights that the preferred settlements for renters in Dubai continue to be Jumeriah, Emirates Hill, Arabian Ranches, Downtown Dubai, Dubai Marina, Business Bay, and Discovery Gardens.
Yet, he also pointed out that places in particular with increases in demand for rental property are most notably The Greens, Discovery Garden, Liwan, and Living Legends.
LACK OF AVAILABLE VILLAS
A recent report from real estate agency, Betterhomes highlights the recent average lease increase in Dubai. The report conveys how leases for townhouses and apartments have increased by between 29% to 33% on a year-on-year basis.
But also, the lack of supply for villas in Dubai has seen an even greater increase in villa lease prices by 64% in the same time. This is at large given the significant under supply of villas within Dubai’s market. So, landlords are seeing this as an ideal opportunity to capitalise upon sales momentum, selling up, or exiting the market.
