The real estate analyst firm, Asteco, reported that Dubai rents will continue to soar higher in 2022 as a result of the market’s recovery from the pandemic last year, despite the slow growth rate.
“Relocations from Sharjah to Dubai are expected to slow down due to rising rental rates in Dubai and the relative affordability in Sharjah,” Asteco said in the annual report on Thursday.
The lockdown and movement restrictions resulting from the Covid-19 also resulted in reduced relocation from the Northern Emirates to Dubai after the pandemic outbreak despite an increase in affordable developments in Dubai, it said.
The real estate industry insiders say that the migration of tenants within Dubai that started over the past few years from affordable to more luxurious localities continued last year due to a drop in rents.
Rents in some localities such as Business Bay, Greens, Deira, Dubai Sports City and Palm Jumeirah rose or crossed to the 2012 level while others – primarily affordable – were close to catching up with a 10-year high.
When compared year-on-year, the latest data from real estate consultancy Asteco showed that showed one-bedroom apartment rentals rose last year in most of the mid to high-end areas such as Downtown, Palm Jumeirah, Business Bay, Dubai Marina, Greens, Jumeirah Beach Rents, Jumeirah Lake Towers while rentals in affordable localities such as Deira, Discovery Gardens and International City dropped.
Due to massive oversupply, rents and property prices started to decline in 2014, which continued till early 2020.
The property market had hit near the bottom in early 2020 after the outbreak of the Covid-19 pandemic.
The Asteco’s annual report’s data showed one-bedroom apartment has risen from Dh73,000 in 2020 to Dh75,000 in 2021 Downtown, from Dh90,000 to Dh95,000 in Palm Jumeirah, from Dh58,000 to Dh60,000 in Business Bay, from Dh58,000 to Dh65,000 in Dubai Marina and Greens, from Dh70,000 to Dh72,500 in Jumeirah Beach Residence and from Dh55,000 to Dh57,500 in Jumeirah Lake Towers.
Among the affordable segment, prices in Sports City and Jumeirah Village remained static at Dh40,000 for a one-bedroom apartment while slipped in Deira and Discovery Gardens from Dh43,000 to Dh37,500 and from Dh30,000 to Dh26,000 in International City.
Thus, the study reports that tenant retention will become extremely challenging for the landlords with the expected increase in supply. This, in turn, can be achieved by setting competitive rates, incentives and engaging property management.
