Whether you've lived in your current home for years and the rental has skyrocketed, or you're simply searching for a change of environment, chances are you've combed through property websites seeking the best value offers or harboured fantasies about that beachfront house.
There is a ton of choice, which is good news. Everything you want is available, including studio apartments Downtown, penthouses on the Palm, three-bedroom villas in the Springs, and townhouses in Damac Hills.
Rents are rising, which is a less positive news. Last month, the average yearly rent in Dubai for a villa or family property was nearly 268,760 dirhams. The past year has increased rental costs in many Dubai residential districts.
As of the first quarter of 2022, the average rent for an apartment climbed by 4%, while the average rent for a villa jumped by 6%.
In contrast to more sought-after areas like Palm Jumeirah, Dubai Hills, and Dubai Marina, other areas of the emirate have not seen a significant rent increase.
Many inhabitants are considering moving to neighbourhoods outside of Dubai's busy city centre due to the rise in rentals in many residential districts, particularly those adjacent to essential portions of the city.
Here are five reasons for the frequent increase in rentals in Dubai.
Rents in Dubai were rising all around the city. The average sale price of villas in Dubai has increased by 14% over the previous year. Moreover, an increasing number of foreign workers are flocking to the city and are fuelling the rise in rental prices.
It also reflects rising luxury real estate costs, which increased 89% in the previous year. With an average price of AED112,737, Deira is the most cost-effective location to rent a villa. However, this still marked a 3.5% increase. Moreover, the increase in rentals will decrease the city's attractiveness in the near future.
The rate of increase in some neighbourhoods and typologies may influence affordability in the city considerably.
This could thus have an adverse effect on the sector's competitiveness and have a negative ripple effect on other industries, especially given the high cost of living and weaker global economy.
The government's response to the pandemic and its lenient immigration regulations are luring more foreign residents and buyers, increasing demand for housing and rental properties in Dubai.
The emirate's real estate market is thriving due to an inflow of new residents, including bankers escaping tight COVID restrictions in Asia, cryptocurrency speculators, and wealthy Russians leaving their sanctions-hit nation following its invasion of Ukraine.
People have flocked to Dubai as a result of the numerous events that have taken place in the area over the past two years, including significant international ones. But how has the impending World Cup in Qatar and Expo 2020 Dubai impacted the rental market? It would appear that this is the case, which will likely increase short-term rental agreements as the year goes on.
Short-term rental demand has increased in response to Expo 2020 Dubai and the World Cup in Qatar. Rental fees have risen by 20 to 25 per cent in some places as hotel owners profit from this. In the fourth quarter of 2022, there will be more tourists, which will probably result in higher annual rental rates.
There are now 33%, 25%, and 64% more searches for apartments, townhouses, and villas than there were a year ago. The rental market for properties in Dubai has recently seen several changes.
With occupancy rates for quality residential projects averaging well, residential properties have remained in great demand.
The activity level in commercial and residential properties was the same in the previous quarter. With renewal costs rising by 5% to 10%.
Since the onset of the global epidemic, the real estate market in Dubai has had a strong upturn, with villa values in upscale neighbourhoods jumping by more than 100%. The current market cycle marks a dramatic shift from the emirate's previous two, primarily by buy-to-let or buy-to-flip investments.
The emirate's luxury real estate market is thriving thanks to an inflow of wealthy buyers, including Russians looking to protect their money and bankers looking for second residences.
Dubai Land Department and Property Finder collaborated to release the Dubai Residential Rental Performance Index. A 12-year high for the number of real estates rental contracts was broken in 2021, with 564,036 leases executed throughout the year.
Compared to 2020, yearly rentals grew by 50.3 per cent and non-annual rents by 75.5 per cent. It's noteworthy that, based on data over the past several years, the annual number of rentals has climbed by about 7% on average over the past five years, but in 2021, it increased by 56% in 2020.
In January 2022, the Dubai real estate market saw approximately 51,000 rental contracts, evenly split between new and renewal contracts. The most common rental agreements for apartments were for two bedrooms, with one bedroom following closely behind. The most common rentals for villas and townhouses were for three bedrooms.
The demand for villas in Dubai is still relatively high, especially in popular neighbourhoods such as Emirates Living, Palm Jumeirah, Al Barari, and Arabian Ranches. Apartments are more plentiful than villas. Hence the increased demand has driven up villa prices. Due to the strong demand and scarcity of penthouses and more extensive flats in Dubai, rental rates have increased.
Al Habtoor City, Mohammed Bin Rashid City, Downtown Dubai, and JLT are more expensive to rent than before. At the same time, Dubai Hills Estate had a 40 per cent year-over-year increase in rent in August 2022.
However, apartments are quickly rented when they are in a terrific location, are a good size, and are priced reasonably.
TRPE is one of the leading real estate companies in UAE. We have been dealing with clients for over many years. We are aware of the real estate market of Dubai and how the market changes frequently. We ensure our clients' purchase or rent apartments and villas in the best locations. We assist our customers in the best possible manner. With increasing demands in rentals, we understand searching for apartments has become a hassle. Therefore, TRPE promises to help you find the best deal in your budget. Contact us now for more information.
A step by step guide to acquiring your property in Dubai. Speak to one of our Dubai experts if you need more information.Learn More
A step by step guide to selling your property in Dubai. Speak to one of our Dubai experts if you need more information.Learn More
Here are our area guides that will allow you to choose the most suitable neighbourhood for your tastes. Speak to one of our Dubai experts if you need more information.Learn More
Here are our development guides that will allow you to choose the most suitable development for your tastes. Speak to one of our Dubai experts if you need more information.Learn More
By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site analytics and advertising efforts.