Further decline in Dubai property market in April
An increased supply of residential real estate units in some of Dubai’s most popular areas has resulted in further rent declines in April but there are fewer disputes.
Locations such as Palm Jumeirah and Dubai Marina which have performed better than other parts of the emirate during the past six months are now seeing rents fall. Rents have gone down by up to 6% according to a report from Landmark Advisory.
Average rents for a two bedroom apartment on Palm Jumeirah had fallen from AED120,000 to AED115,000 a year, a drop of 4%, while the same type of property in Dubai Marina has fallen about 6% from AED90,000 to AED85,000, the report says.
The Landmark report also says that villa lease rates have remained relatively stable with certain areas like Arabian Ranches, Victory Heights, and parts of the Lakes experiencing lower limit declines.
The report concludes that the risk in both the residential and commercial property markets continued to be the new supply forecast to enter the market during the next three years.
‘Lease rates in most areas, in both the residential and commercial markets, will fall in the coming months, especially for lower quality buildings in the least developed and integrated communities,’ the report says.
However, the company said it had seen a recent increase in enquiries from companies considering relocating their operations to Dubai. ‘While this is still a nascent trend, it is one that we predict will gather momentum over the next three to four years as commercial sale prices and leasing rates bottom out,’ said spokesperson Jesse Downs.
The report comes at the same time as officials revealed that rent dispute cases in Dubai dropped by more than 50% in the first quarter of 2010 compared to the same period last year.
Dubai recorded 943 rent dispute cases as opposed to 2,003 cases in the first three months of 2009, said Mohammad Al Sheikh, general secretary of the Dubai Rent Committee.
Dispute numbers were 40% lower in 2009 from the previous year. A total of 5,373 dispute cases were registered in 2009 against 9,000 cases in 2008 while Dubai recorded a 10% increase in the total number of rent dispute cases resolved in 2009, he added.
Al Sheikh said the main reason for a drop in the new rent cases registered was the fact that now more and more people were adhering to their rent contracts. ‘People are now understanding the law and abiding by their contracts,’ he said.