Rentals in Dubai’s prime areas remain unchanged: Report

Dubai / Emirates Business

According to the latest Chestertons MENA Observer report, the rentals in majority of the apartments sector across prime areas in Dubai didn’t witness any change in Q4 of 2015. However, locations such as Jumeirah Park, Islands and Golf Estates observed a slight rental decrease of 3%, 2% and 2% respectively. Villa segment also saw a decrease of 1% in rental price in Q4 last year as compared to the previous quarter.
“The residential prices dropped in the last quarter and that has made the yields attractive. Apartments provided higher average yield than villas. International City and Discovery Gardens were the highest yield providers in apartments. Villa segment provided a 5% yield as the market witnessed a decline in both the rental and sales prices. Mudon, The Springs and Victory Heights were a cut above the average yield. However, we expect the market to remain sluggish during the first quarter of 2016 due to a combination of factors including lower oil prices, dollar appreciation and regional economic uncertainties,” said Declan McNaughton, Managing Director, Chestertons UAE.
The Springs and Meadows were the top traded destinations with transactions worth over AED940 million. Apartments sector accounted for 64% of the transactions in Q4. Mortgages during the same period had dropped by 43% indicating the fact that the end users demand for residential properties is slowing down.
“Property prices have corrected significantly over the last year with attractive bargains in some locations. With high rentals, this is an apt time to lock a property that will bring good yields. There is a general consensus in the industry that the market will remain subdued during 2016. However, this phase could provide good investment opportunities for the long-term. Also this phase will not stay there for long as we move closer to EXPO 2020. This is an ideal market for both end-users and long term property investors,” added Declan.
“Dubai market is expected to add approximately 3,000 more units during the course of 2016. However, imbalance in the supply and demand situation will continue to build pressure on property prices across the Emirate. We expect the sale prices to correct further during the year. The total number of transactions for Q4 2015 dropped by 44% amounting to AED24.3 billion compared to AED33.1 Billion in Q3 2015.,” Robin Teh, Country Manager, Chestertons UAE.
Sales transactions for Q4 2015 amounted to AED12.7 billion and had a marginal decline of 1% compared to Q3 2015.
“In 2015, an estimated 15,000 units were delivered in Dubai. We are likely to see a similar number being delivered over the next three years, following which supply may reduce significantly. Master developers could alter the construction and delivery cycle accordingly and this could keep the supply figures under control,” added Robin.
Chestertons with its Middle Eastern headquarters in Dubai and the company’s office in Abu Dhabi offers a full range of property services, including residential and commercial sales and leasing together with professional property valuation and property management services.
The company has also created a new ‘International Properties’ arm that will focus on EU based properties for Middle Eastern investors. The company will facilitate investors from the region to buy properties in Spain, Monaco, Cyprus and several other EU countries from its office in Dubai. The company’s portfolio of properties ranges from apartments to multi-million Euro grand estates in Spain encompassing Marbella, Mallorca, Ibiza and Barcelona.