Following The Pandemic, Recovery Started As Numerous Foreign Workers Returned Along With The Improvement In The Job Market And An Influx Of Hnwis.
Rents in Dubai will continue to rise in 2023, especially in the most sought-after areas where demand is outpacing supply. While rental growth in more affordable areas is anticipated to be moderate. Since 2014, the emirate’s rents have been declining. But after the pandemic, they started to rise as more foreign workers returned. As the job market, recovered and high-net-worth individuals started flooding the market.
In 2023, David Abood, a partner at real estate consulting firm Core, anticipates an increase in rents for all tenants. “As long as there is a supply shortage in the prime market, rents are likely to keep rising. We anticipate this market segment to experience moderate rental increases given. That the majority of the upcoming supply is transitioning to the more widely available and affordable apartment districts, said Abood.
In terms of rentals, Coldwell Banker vice president Ayman Youssef predicts that luxury villas in sought-after neighborhoods like Emirates Hills and Palm Jumeirah will do best in 2019. “We see this trend indicating an upward movement in 2023 as well. Moreover, the main cause of this is the influx of rich and powerful migrants from Russia and Ukraine. That are a significant contributor to the actual inflation in the real estate market. Conversely, skyline views, gated communities, and beachfront properties are also likely to be more in demand. Which will ultimately result in a rise in rents, according to Youssef.
With increases of just under 2% over the previous three months, rents appear to be beginning to level out. As per Richard Waind, group executive director at Betterhomes. It is not surprising that well-located homes have seen the highest rent prices. Because there will not be more than 30,000 new homes built by 2023. There will not be many villa or townhouse communities. I anticipate that scenario to occur until 2023. High renewal rates will make traditional villa communities’ insufficiency of rental stock worse, pushing rents even higher, he predicted.
Rents Below The Level Of 2014
Executives in the real estate sector claim that despite the increase, rents are still below their 2014 peak. “Rents decreased between 2014 and 2021, and even though they have gone up in all communities over past 24 months. They are still lower than they were in 2014. Particularly apartments still have a ways to go before reaching previous peaks. “Rents in JLT and Sports City are still 30% and 40% behind, respectively. While average rents in Dubai Marina are Dh121000, 9% below their 2014 peak,” said Richard Waind. He gave another illustration, stating that the average rent in Arabian Ranches is currently Dh217000, which is 6% less than its 2014 peak.
Some mid-market neighborhoods, including villa neighborhoods like Jumeirah Village Circle, The Springs, and the Meadows, and apartment neighborhood’s like Discovery Gardens, Dubai Sports City, Jumeirah Village Circle, and JLT, are still below their 2014 peak values, according to David Abood.
When comparing peak values from 2014 to 2022, it is crucial to keep in mind. That there were over 200,000 fewer housing units and almost 1.2 million fewer people living there. Because the market is current rental prices reflect a much-developed one with strong socioeconomic factors supporting the city’s development.
Affordable Locations in Dubai
Executives in the real estate sector disclosed that there are still a number of neighborhoods in both Old and New Dubai. Where rent prices are below their 2014 absolute peak. The freehold communities of International City, Liwan, Discovery Gardens, Dubai Silicon Oasis, and Dubai Sports City are among the most reasonably priced apartment communities in the emirate, according to David Abood of Core. Other freehold communities include the established neighborhoods of Bur Dubai and Deira. International City, IMPZ, Dubai Silicon Oasis, and Town Square are a few of Dubai’s most cost-effective neighborhoods, according to Ayman Youssef.