Rents for villas and apartments in Dubai will continue to increase this year, but at a slower pace
Views of Dubai Marina from the bridge connecting the Jumeirah Beach Residences in Dubai. – file image
Experts said that the rental market in Dubai witnessed a strong recovery last year as the economy improved through a successful vaccination program and the gradual opening of international borders.
Referring to the latest report from real estate consultancy ValuStrat, analysts and industry professionals said market sentiment is expected to increase this year. They said residential and commercial rents will continue to rise in 2022, but at a slower pace.
2021 was the year of recovery from the challenges of the pandemic and the beginning of a new normal. Prices and rents mostly recovered to pre-pandemic levels that broke record sales volumes and values,” ValuStrat reports.
Haider Taima, head of real estate research at ValuStrat, said the ValuStrat price index for rental values in Dubai scored 67.3 points last year, an increase of 6.7% quarterly and 18.9% annually. However, average rents are still 4.9 percent lower than they were when the COVID-19 pandemic began. He said that the weighted average annual rent for apartments as of the fourth quarter of 2021 was Dh58 and Dh707 and for villas Dh236.650.
“There is no doubt that villas have outperformed apartments in terms of rents. Villas increased by 26.8 percent year-on-year and 6.3 percent quarter-on-quarter, while apartment rents grew by 14.3 percent year-on-year and 6.9 percent year-on-year. Quarterly basis The Sunday Times.
In response to the performance of the rental market in Dubai in 2021 compared to 2020 and 2019, Tuaima said that the VPI index scored 70.8 points in the fourth quarter of 2019 compared to 56.6 points in the same quarter last year, which reflects a decrease of 20 percent.
Atta Shbeiri, CEO of Dubai-based real estate portal Zoom, said that the rental market witnessed a strong recovery due to the effective policy measures taken by the government.
“Expo 2020, the return of foreign investors and effective handling of the pandemic are some of the main reasons that led to a strong recovery in the rental market,” Al-Shubairi told the Khaleej Times on Sunday.
Prospects for 2022
The ValuStrat report said the outlook for 2022 is cautiously optimistic due to local and global pandemic dynamics and over-supply concerns. However, the report warned of downside risks and said night may re-impose restrictions on movement due to the spread of the Omicron variant of the Covid-19 virus.
Overall, prices and rents are expected to move at a slower pace, although some highly desirable prime locations are expected to see capital values reach their pre-2014 peak, the report said.
“Rents in general are expected to rise moderately during. However, prime location properties where demand is high may continue to increase to double the number.”
Nikita Kuznetsov, CEO of Metropolitan Premium Real Estate, said rents will increase in Dubai this year but at a slower pace.
“We believe that 2022 will see rent prices continue on their northward path, but the rate of increase will be slower than in 2021,” Kuznetsov told the Khaleej Times.
“We expect the demand for villas to continue to rise, and as a result, the rent increase for villas will be higher than for apartments. On average, we can expect to see an increase of 5 to 7 per cent in apartment rents and seven to 10 per cent for villas.”
He said the popular locations for the apartments include Port de la Mer, Emaar Beachfront and Dubai Creek. At the same time, while for the villas, we “expect significant interest” in the Tilal Al Ghaf project as well as the Amalfi properties upon completion.
— muzaffarrizvi@khaleejtimes.com
