Average residential rental rates in Dubai are nearing the bottom, with values of most villas and flats either stabilising or even rising during the second quarter, new research showed.
Data compiled by real estate consultancy Cluttons showed that rental values for high-end villas actually increased marginally during the quarter, while prices for low-end villas and high-end apartments stayed broadly similar in comparison to the previous three-month period.
Overall, the drop in apartment rental values slowed during the second quarter, but are still falling by between 3.5 percent and 10 percent in comparison to the first three months of the year, Cluttons said.
“We feel, however, that even in light of these positive signs, the summer months of Q3 2011 will bring a resistance to any growth in all sectors,” the agency said.
Cluttons added that specific areas within Dubai, such as Dubai Marina, Downtown Dubai and the Palm Jumeirah, had all performed robustly, while less-developed areas with limited infrastructure were still suffering.
On the commercial side, the consultancy said that “rents no longer appear to be dropping at the same speed”. However, rents fell most in new business districts such as Tecom C, Business Bay, Jumeirah Lake Towers and Dubai Silicon Oasis due to new stock coming onto the market.
Cluttons also indicated that speculation over the movement of firms from troubled areas in the region to Dubai had not yet translated through into the local property market.
“We expect this may become more evident in Q3 and Q4 of 2011,” the report stated. “Companies within these locations cannot simply close their offices. As time moves on, we will begin to see contingency plans unfold and cities such as Dubai benefit from an influx of companies and staff.”
The UAE government last month said it would extend three-year visas to owners of properties worth AED1m or more, replacing existing visas that require renewal every six months.
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