Rents for apartments and villas in Dubai seeing substantial declines, report shows

[Nicholas Wallwork]

Average rents for apartments in Dubai fell by up to 26% and for villas by 34% in the last three months compared with the first three months of the year, according to the latest published figures.

Apartment and villa prices also declined but enquiries and transactions are increasing, says the second quarter report from property services firm Asteco.

Studios saw the steepest decline with rents falling 26% while one bedroom apartments were down 6.13%. Two bedroom apartment rents went down 18.94% and three bedroom apartments suffered a fall of 19.19%. Villa rents dropped 34%.

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[kauser]

rental of apartment

I have a one bed apt in T3 spain cluster to rent out. How long will it take to rent, my previous tenants have just moved out because they could not afford rent! Is there any good agents out there, I need it rented out sooner rather than later.

kauser

 

[AjmanInvestor]

Ups and downs are part and parcel of life and economies all over the world...

Ups and downs are part and parcel of life and economies all over the world...I am not shocked to see it go down...because I have seen this in year 2000 also......influx of expats living in ajman sharjah and abudhabi to dubai as rents went down...with all around tolet boards in dubai......its a cycle and very soon uae and the whole of gulf and dubai will again bounce back......soon...

dont worry be happy......always....:marchmellow:

 

[sasherwani2]

Ups and downs are part and parcel of life and economies all over the world...I am not shocked to see it go down...because I have seen this in year 2000 also......influx of expats living in ajman sharjah and abudhabi to dubai as rents went down...with all around tolet boards in dubai......its a cycle and very soon uae and the whole of gulf and dubai will again bounce back......soon...

dont worry be happy......always....:marchmellow:

2000 wasn't the year of a severe recession. It was just the dot-com bubble crash that the world recovered from in 11 months. The current recession is hurting Dubai deep into its roots.

I dont think we shall see any stability in rents for another 2 years. Rents shall stabilize by 2010 end. Those rents shall not 'increase' till atleast 2015.

 

[georgihh]

2000 wasn't the year of a severe recession. It was just the dot-com bubble crash that the world recovered from in 11 months. The current recession is hurting Dubai deep into its roots.

I dont think we shall see any stability in rents for another 2 years. Rents shall stabilize by 2010 end. Those rents shall not 'increase' till atleast 2015.

2000- 20001
25% of the flats were empty in Dubai and the landlords couldn’t drop the prices anymore as they were at the bottom.
2 Bedroom flat in Bur Dubai with facilities was going for 40K.
The rents were steady until 2004 when the so called construction boom started.
Currently, there are not many more jobs in Dubai than back in 2001 and I don’t see any coming in the next 2-3 years.
Some prices will go up some down but the current rental prices will go down another 10-15 % in the next year.
I hope we can witness price increase after 2-3 years

 

[KhanatMarina]

Property Prices

2000- 20001
25% of the flats were empty in Dubai and the landlords couldn’t drop the prices anymore as they were at the bottom.
2 Bedroom flat in Bur Dubai with facilities was going for 40K.
The rents were steady until 2004 when the so called construction boom started.
Currently, there are not many more jobs in Dubai than back in 2001 and I don’t see any coming in the next 2-3 years.
Some prices will go up some down but the current rental prices will go down another 10-15 % in the next year.
I hope we can witness price increase after 2-3 years

Now there are much more then 25% of the properties empty. I won't be surprised if anyone says that over 50% of Dubai properties are empty. The size of Dubai's real estate market is at least 4-5 folds bigger (if not more) then it was in the 90s . The population bubble bursted with the financial Tsunami as we are still seeing the after effects. Ironically speaking, the gap between demand and supply is far from a narrow-down mode. On the contrary this gap is still increasing as people are leaving and more new properties are made available into the market. The handover of these new properties will continue till the end of 2011 and it is estimated at over 100,000 units!!! I will not be surprised if a 2BR Bur Dubai style apartments be available at those prices again. Lets not forget that traditionally Dubai has its neighbouring rivals i.e. Sharjah & Ajman who are also desperate for their share of Dubai's market with better quality & quantity compared to a decade ago.

The way the world economy is behaving right now and the political situation in the region (Iranian sanctions) one should not have high hopes of a quick bounce back. I would guestimate it to be around half a decade.:egg:

 

[georgihh]

Unfortunately there is no way out. Who has bought has lost.
Renting business is dead the profits a very small.
Dubai Government is desperate for money – this wasn’t the case in 2001.
In 2001 the law, the fines, the business conditions were far better and attracted a lot of people in the next 5 years. Now is much more difficult and I don’t see many expatriates coming and settling down in Dubai.

They need to relax the rules in UAE and only than we can start thinking for the future ,for the time being prices(properties) are still going down

 

[KhanatMarina]

Dubai Property

I agree to your comments and analysis, but I would comment on your last statement about foreighners settling down in Dubai.

Practically speaking, given sound financial conditions many people would still come to Dubai. Simply because Dubai has an infrastructure that no country in the region can match. The added advantage in Dubai is that it has the most flexible financial freedom with a friendly business environment allowing numerous people to park their funds tax free. Real state and business laws are quite transparent. Life security is at its best. So having limited choice on the planet, people will fall for it once again and this place will pick-up provided the global economy stabilizes within a reasonable time frame. Tourism alone is a huge industry which is directly linked to the global economy.

 

[Dod]

Forget the glitter, Dubai is still a natural international trading hub. That's why it's here in the first place. People will trickle back if it becomes genuinely much cheaper to do business and relocate staff here with the lower and lower rents.

I hope the government recognises that the best way it can make medium and long-term income out of this situation is to tempt people back with genuine low costs, not try to tax and fine us out of existence. That would be short-term and counter-productive.

Unfortunately, either way, it's a long climb back for many investors.