By Andy Sambidge
New Prime Global Rental Index shows emirate was second best performing market last year behind Nairobi
Prime rents in Dubai rose by almost 14 percent last year, making the emirate the second best performing market in the world, according to Knight Frank.
Only Nairobi, Kenya saw rental values increase by more than Dubai during 2013 with a growth of nearly 26 percent.
The Knight Frank Prime Global Rental Index for the fourth quarter of 2013, which was published on Monday, showed that rents rose on average by 4.8 percent worldwide in the 12-month period.
In Dubai, rents increased by 13.6 percent compared to Q4 2012 and rose by 5.6 percent between June and December last year, and by four percent in the three months to end-December.
In its report, Knight Frank said: "A two tier market emerged in the second half of 2013 with secondary locations recording a stronger rate of growth than those in the emirate’s prime developments.
"Events in Syria and Egypt emphasised Dubai’s status as a regional safe haven. Tenant demand also rose following the announcement that the city will host Expo 2020."
It added that although prime rents in Nairobi and Dubai recorded the strongest rate of annual growth in 2013, rents here are half, or in Nairobi’s case, as much as 70 percent below those found in London and New York, where rents fell by 2.3 percent and rose by 3.5 percent respectively during 2013.
Earlier this month, Knight Frank named Dubai the world's best performing real estate market during 2013 for price growth, with increasing nudging 35 percent.
The Knight Frank Global House Price Index showed mainstream property prices in the emirate rose by 34.8 percent during the last 12 months.
Although the increase slowed slightly in the last six months to 15.3 percent, Knight Frank said prices in Dubai were still 25 percent below their 2008 peak.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.
Here we go again, no supply and demand excuses this time around. So, higher rents means higher salaries, higher living costs, higher school fees and higher project costs...and another bubble...