By Staff writer
New report says both Dubai and Abu Dhabi markets see further declines in third quarter
The average apartment rent in Dubai dropped to AED125,000 ($34,000) per annum in the third quarter of 2016, down 2 percent from the previous quarter, according to a new report.
The study by real estate website Bayut.com showed that although values increased in some localities, there was an overall downward movement of apartment rents in Dubai during the quarter.
It added that Dubai South appears "well set to become the next investment hotspot in Dubai", amid ambitious project launches by developers such as Emaar.
Category-wise, studio rents were down 2 percent in Q3, with an average of AED55,000 compared to AED56,000 in Q2, Bayut's report said.
It added that one-bed apartments witnessed a greater drop of 8 percent, with the average rent recorded at AED92,000 while the average rent of two-bed units recorded a 1 percent drop as did three-bed units.
Buyut said the average rent for 4+-bed apartments also fell by 1 percent in Q3 to AED302,000.
According to Bayut, the top Localities for renting apartments in Dubai during Q3 were Dubai Marina, Jumeirah Lakes Towers and Bur Dubai while the most popular areas for buying apartments were Dubai Marina, Jumeirah Lakes Towers (JLT) and Downtown Dubai.
Bayut.com data showed that the average studio rent in Abu Dhabi fell 6 percent to AED56,000 in Q3, while rental values of 1-bed apartment also dropped by 6 percent to AED90,000.
Two-bed and 3-bed apartment rents fell to AED133,000 and AED170,000 respectively, registering decreases of 1 percent and 6 percent while rents of 4+-bed apartments rose marginally in Q3 to AED242,000.
Bayut said the top localities for renting apartments in Abu Dhabi during Q3 were Al Reem Island, Al Raha Beach and Al Reef while Al Reem Island, Al Raha Beach and Khalifa City A were most poopular for buyers.
The Bayut report said: "There was a clear slowdown in the drop in rental values in Dubai, which could be attributed to the market slowly recovering from the bigger drops in previous months.
"The correction in rents could also be a result of a consistently growing set of tenants now looking to become homeowners by opting for numerous rent-to-own offerings by several developers, a phenomenon that has had an obvious effect on the rental segment of the market.
"Abu Dhabi on the other hand presents a mixed picture. Although the falling rents have made accommodation in the emirate more affordable, the strength of rental yields mean the units offer an equally lucrative proposition to investors. The capital’s strong economy is keeping the realty sector buoyed, while growing opportunities for work make for a healthy rise in population, which in turn keeps the market going.
"Considering the host of project launches and persistent interest of local and real estate developers, it is safe to say the UAE realty sector is headed in the right direction and better times are around the corner."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.