Dubai rents seen rising by up to 24% - CBRE

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Rental rates in Dubai rose by an average of 17 percent over the last 12 months, with some of the most popular areas rising by nearly a quarter, according to research by real estate consultancy CBRE.

Dubai was one of the hardest hit real estate markets during the downturn, with CBRE reporting that average one, two and three bedroom apartments seeing rental rates slumping by 54 percent between 4Q2008 and 4Q2011.

Over the last 12 months, this slide has begun to rebound, with average prices increasing by 17 percent, with popular locations in Downtown Dubai, Dubai Marina, the Greens, Jumeirah Beach Residence and Palm Jumeirah increasing by around 24 percent year-on-year.

“Dubai is seeing higher rental growth this year due to a sustained period of population growth, positive economic performance, increased occupier demand, and limited availability of quality units in the most desirable locations,” said Matthew Green, head of research and consultancy at CBRE Middle East.

This positive growth was also seen in the amount paid by new buyers, Green added. With around 14,000 sales registered by the Dubai Land Department in 2012, he said prices rose by an average of 13 percent, with the Greens and Downtown Dubai performing even stronger and surging ahead 20 percent year-on-year.

Figures showed that 80 percent of buyers were still cash buyers, CBRE said.

Going forward, CBRE estimates around 36,000 new residential units are set to enter the Dubai market over the next three years, with the majority of these set to come on stream in Dubailand.

In the commercial office market, CBRE estimated 1.895m sqm will come onto the market over the next two years, on top of the 7.15m sqm of existing stock.

However, CBRE research found the office market was very location-specific.

Occupancy rates on Sheikh Zayed Road (CBD) average around 83 percent, compared to a citywide average of 53 percent. By 2014, this is likely to average around 50 percent, CBRE said.

Around 60 percent of developments in the pipeline in Dubai are made up of multiple owners, known as Strata, which is a deterrent for large occupiers and has resulted in a scarcity of adequate units over 50,000 sqft, added Nick Maclean, managing director of CBRE in the Middle East

“This means that a significant portion of the overall office inventory will always be unattractive to large occupiers, whilst some spaces in inferior location may never be occupied,” the report concluded.

Related:
Companies
Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

Posted by: oLaZERKtRXFEcI

Dear friend Mr. Jitendra, i am able to get you on the coctnneion of the very social network Facebook and i'm pleased to be friend with you and reading and sharing with you. Writing has given a great feeling to me and enthusiasm too for vibrancy of life, its accidents and ups and downs. Thanks for monumental pictures and beautiful words.

Posted by: Ed B

Real estate has its own micro specifics. It?s just how you market the data. People who know the region well, who have been here for a while, know the high risk and also the potential to gain a lot and to lose a lot. But you cannot predict it. Looking at how the property owners had to suffer over the past few years, I think that for main stream expats it would have been more economical to rent properties with fluctuating rental prices, than to have purchased property. We can think positive and believe we get another property boom based on whatever information, but at the same time there is as much signals on the desk indicating it can drop down again. For the mainstream expats the question is: do you want to gamble with your retirement money?

Posted by: Paul King

Ignore the misguided and hallucinating crowd who believe trees grow to the sky! During the very wellcome correction of Dubai Property values (2008-2012), rents decreased from hyper-crazy to very expensive. With rents rising 25% this year in the popular near-completed communities, the Dubai property cheerleaders are enjoying a "moment in the sun".
Disregard their nonsense; they will shrivel up and decay come the spring!

Posted by: Ray

I think Peter Cooper is right !
There is always a cycle in realestate and for 3/4 years there was a slow down and now its slowly but surly picking up , this is a fact.

Posted by: Olga

Regardless of how the news portray Dubai, never ever I will invest there for one simple reason; 90% are expats in a region that is not too stable! Saudi Arabia for example is a much better market since the majority are locals. And 24% is not even close to reality. Just couple of days ago I read another article that rents rose by 17%!! Such articles will only lead another "fake" boom, and another market crash. I'm saying this because I have already suffered from my 55,000,000 AED investment in Dubai and I have lost almost half of the investment!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Trump casino resort business files for bankruptcy

Trump casino resort business files for bankruptcy

The Donald founded the companies but is now suing them to have...

Do celebrity branded projects ever work?

Do celebrity branded projects ever work?

The long list of celebrity-endorsed real estate developments...

1
Is this the end of the Gulf’s Indian cash dash?

Is this the end of the Gulf’s Indian cash dash?

From currency woes to taxation loopholes closing and a clampdown...

2
Most Discussed