By Staff writer
Propertyfinder report reveals 'startling trend' as low oil prices, slowdown continue to hit luxury villa rents
Two luxury villa communities in Dubai have posted very opposing rents during the first half of 2016, suggesting a fragmented markets for renting in the city, according to a new report.
New research from propertyfinder.ae revealed mixed performance for Arabian Ranches and Emirates Hills, two of the emirate's most popular locations.
According to the real estate portal, Arabian Ranches rents rose by 6 percent in the first six months of the year while rents in Emirates Hills slumped by 12.5 percent.
Propertyfinder said the average villa lease price in January at Arabian Ranches was AED250,000 per year and this had risen to an average of AED265,000 per year by July.
Just 15km across town in the upscale Emirates Hills district, rents fell from an average of AED1.2 million per year in January, to an average of AED1.05 million in July.
“Our in-depth statistical analysis, drawing from the vast range of data generated by the site, always brings up a few startling trends,” said Lukman Hajje, chief commercial officer at propertyfinder.ae.
“it’s no secret that we are still dealing with the side effects of the slashed oil prices and other economic factors, so it is not too surprising that Emirates Hills – one of Dubai’s most glamorous communities – would be effected. However, rents dropping by over 12 percent in just six months is an attention grabber.”
He added: “It may be that Arabian Ranches – also an upscale community, but to a lesser degree – is seeing an upturn in fortunes as renters with plenty of cash are deciding to spend it slightly more cautiously.”
The propertyfinder.ae search results statistics also show that Arabian Ranches as the most viewed communities for rental villas in July while Emirates Hills did not appear on the top 10 at all.
Incorrect. Villa rents are down across the board in AR (personally had a 15% reduction this year).
In 2016 the ranches virtually doubled in size if you include developments like Mudon, Reem etc - a quick tour of some of these places and you'll quickly see many are standing empty. Landlords looking to increase rents under these conditions will be waiting a long time.
Even Arabian Ranches rental averages at AED 22000 per month and I too find it hard to comprehend a 6% increase, just based on driving around the full extent of AR and seeing such a significant volume of empty properties.
However, there will have to be a large number of highly paid expatriates to soak those up, even those on AED50k a month are shelling out 44% of their earnings on rent plus utilities.
With oil prices showing no real impetus hovering just above $44 per barrel and the pressure that must put on salaries, the rental model simply does not add up.
In all honesty I can see a greater fall in the 2nd half, I would like to be proved wrong of course given that property is such a major economic pillar.
Oh my, someone else claiming that oil prices impact Dubai economy. I am waiting for the usual reply, but given the silence for so long he must be on holidays.
Actually check on today edition the article on Iraq telling oil companies to shut down their Dubai offices. The drop in high spenders, both visitors and residents, is being measured by all kind of companies. The news I get from my sector is an acute drop in number of postpaid accounts (typically higher paid expats, company paid numbers) across the GCC.
The article states a 250k average, not 220k, but in either case the mind boggles at the huge number of properties in the 200k+ bracket. There must be thousands in AR, Jumeirah, Umm Suqeim, Barsha, etc. How can people afford them? There must still be many employers giving generous accommodation allowances!
There is someone who really believes the prolonged oil price slump will not have an effect on the Dubai economy?
@JRH, there is one person in the forums who claims that oil prices are not relevant to Dubai economy because "oil revenue es less than 20% of Dubai GDP"
If he believes for real or just trolling nobody knows for sure.
He will soon claim that you are me, or James, or that we are all the same and one.