2024 will continue to see rents rise in Dubai, but the increase would be at a more modest pace, given the market’s undersupply and the migration of investors and foreign professionals into the city.
However, next year will see a number of handovers happen in areas, such as Tilal Al Ghaf and Jumeirah Village Circle (JVC).
This would provide greater options to tenants in the neighborhood, while it would give landlords a run for their money.
Betterhomes’ leasing manager, Jacob Bramley, said that rents would increase at a more measured rate in Dubai than what has been seen in the past two years.
He added that property was still undersupplied, with a large number of listings and enquiries seen in the fourth quarter.
But, the price increases are expected to be less punchy because of the number of homes scheduled to be handed over next year, as they would provide competition on prices.
Asteco, the real estate consultancy, revealed that the growth rate of the rental market in Dubai has moderated gradually in the third quarter of the year.
Asteco disclosed that even though both upper and lower rental brackets had seen activities, there had been certain averages that continued to remain static.
Asteco further added that there had been a notable slowdown, as rental gains for apartments, offices and villas stood at 3%, 4% and 2%, respectively, in a period of three months.
As far as annual changes are concerned, they were around 18%, 29% and 19%, respectively. According to Bramley, there is a rise in demand for housing across the emirate, leading to a scarcity in vacant properties.
This means landlords have to deal with no or minimal void periods, which affirms a thriving and robust rental market.
According to Property Finder, the areas that are commonly preferred for apartments are Business Bay, Jumeirah Lake Towers (JLT), Downtown Dubai, Jumeirah Village Circle (JVC) and Dubai Marina.
The most popular areas for villas are Damac Hills, Al Barsha, Dubai Hills Estate, Jumeirah and Damac Hills 2.
Based on the popularity and demand, these areas are the ones that are expected to see a higher rental growth in the next few years.
The data from Property Finder in November showed that the highest demand had been for one-bedroom apartments.
Almost 36% people were searching for these, while two-bedroom apartments were the priority of 30% and 24% were interested in studios.
42% of the people were looking for two to three-bedroom villas and 35% wanted four-bedroom villas, or larger options.
66% of the tenants preferred furnished homes, but 32% of them also wanted unfurnished. 51% people wanted unfurnished townhouses/villas, while 48% were looking for furnished listings.
The growing demand will also be sustained through new projects that have been launched in areas that were previously unexplored, as they would provide more options.
Landlords in Tilal Al Ghaf, Cherrywoods and JVC will see increased competition because of new supply, as tenants would have extra options in surrounding areas that did not exist before.