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Dubai rents rise as development stalls

Delays in Dubai property projects drove up the average rent for apartments by as much as 18% in the first quarter, real estate services firm Asteco said in a report.

The news comes despite the government-imposed 'rental cap' of 7%, and as concerns over the cost of living in the emirate grow.
Only 14,000 housing units came onto Dubai's market in 2006, 26,000 fewer than expected, according to an Asteco spokeswoman.

"The rent increases were mainly driven by a shortage of completed residential units," the spokeswoman said.

"However, since a large number of developments are expected to hit the market at the end of this year, the rents are expected to stabilise."

At the end of the first quarter the cost of renting a two-bedroom apartment rose 18% to 115,000 dirhams ($31,310) a year, compared with the year-earlier period, Asteco said.

Rents for one and three-bedroom apartments went up by 14% to 80,000 dirhams and 13% to 140,000 dirhams, respectively, it said.

Rents for villas rose 15%.

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