By Staff writer
New report also says that rents fall by 6% last year; Abu Dhabi prices drop 1% while rents slump by 6%
Average apartment prices in Dubai fell by 11 percent to AED2.29 million ($620,000) while rents dropped by an average of 6 percent, according to new data.
Real estate website Bayut.com said prices in the emirate fell from the 2015 average of AED2.57 million. It added that rents in Abu Dhabi also fell by 6 percent while sales prices dropped by just 1 percent on average across the year.
The report noted: "Having bravely negotiated a rather tough 2016, the real estate sectors of the two main emirates appear well-geared to make positive strides in the New Year.
In Dubai, Bayut said there remained some pressure on apartment rents as new stock was made available in several areas across the emirate. Moreover, an exodus to the suburbs also had an effect on rents in the main parts of the emirate, it added.
According to its data, studio units faced an average rental drop of 8 percent in 2016, down toAED 57,000 from the 2015 average of AED62,000.
The average price for studios also dropped by 5 percent to AED0.77 million while one-bed units faced a similar trend with the average price falling by 10 percent and average rent falling 5 percent to AED96,000.
The average rent for 2-bed units dropped 8 percent to the AED145,000 mark, and the average price for 2-bed units was down 11 percent to AED2.5 million.
On average, 3-bed and 4+ bed units saw rental drops of 6 percent and 8 percent respectively in 2016, to AED202,000 and AED305,000. The average prices for these categories also slumped by 11 percent and 15 percent over the course of 2016.
In Abu Dhabi, authorities reintroduced the 5 percent rental increase cap for the residential sector in December, despite rents falling by an average of 6 percent over the course of the year.
In terms of rental prices, Bayut noticed a fall in values across all categories, with studio unit rents dropping the most during 2016, losing 8 percent. The average rent for these units fell to AED58,000 from the 2015 average of AED63,000.
One-bed unit prices fell 2 percent while average rents dropped by 6 percent to AED92,000.
Bayut said the rental average for 2-bed units dropped by 5 percent to AED132,000 mark, with the average price for units remaining at AED1.86 million in 2016.
Three-beds cost AED2.71 million on average, matching the 2015 average but rents fell by 6 percent toAED 175,000 while 4+ bed units commanded an average rent of AED240,000, down 7 percent, and a sales price average of close to AED4.65 million.
Bayut said: "With prices having levelled out and rents rationalising, the real estate markets in the two main emirates appear closer to maturity than ever, where inflationary and haphazard overnight gains are quickly becoming a thing of the past.
"The overall UAE market is much more suitable for long-term indulgence, one where attractive rental returns and natural capital value gains keep the stakeholders engaged.
"For tenants, there could be no better time to seriously consider becoming a property owner."
It added: "2017 is likely to be the year when preparations for the Expo 2020 gain full momentum and when the engines of job growth, infrastructure development and economic prosperity are set to rev at full speed."For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.