By The End Of August, Average Rent Increases In High-Demand Areas Will Be Closer To 35%.
It seems unrealistic to anticipate a slowdown in Dubai’s housing market in the upcoming weeks. Within Dubai’s freehold areas, there were over 36,800 “Ejari” contracts signed by landlords and tenants just in August. In addition, those figures are 9.7% higher than they were a year ago. The total includes both renewed and newly signed rentals for these apartments and villas. Which are dispersed throughout Dubai’s designated freehold areas.
According to information from the portal DXBinteract.com, rental registrations in Dubai increased by 11%. To more than 250,000 contracts for the period from January to the end of August. Despite the fact that Dubai’s average rental increases have remained in the plus 20% range,
For this reason, market sources claim that speculation about the beginning of a slowdown in rental growth or stabilization at current levels is premature. In Business Bay, a two-bedroom apartment can cost well over Dh100000. Moreover, in recently completed towers, it can cost Dh150000 or more. That follows a 26 percent rise in the year ending in August.
A two-bedroom lease in Dubai Marina might cost Dh120000 after such an average increase of more than 30%. Even moderately priced neighborhoods like Jumeirah Village Circle are still feeling the pull. Taking into account a 12.5% gain, a one-bedroom apartment there would cost approximately Dh45000. Because of the city’s ongoing steady population growth, Firas Al Msaddi, CEO of FAM Properties, said, “We don’t see a slowdown in Dubai rental properties happening in the near future.”
“Second factor is that rising mortgage rates are forcing more prospective buyers to extend their leases rather than buy home. The data for August indicates a 13% decrease in sales of mortgage-backed securities. (The US Fed is prepared to take action in an effort to control inflation. So another round of rate increases could start as early as next week. The money is on a further 0.75% increase. Which will reflect immediately in lending rates given the dollar-dirham.
More Houses Were Delivered, But
The delivery of new homes in Dubai’s real estate market is expected to be significant. Along with Dubai South, Al Furjan, and MBR City setting the pace. Would these be sufficient to halt rental gains?
The first 9 months of 2022 saw consistently high new home deliveries. Moreover, there was no slowdown in rental growth, according to a developer. “New construction isn’t happening all that frequently, and occupancy is low. In most new buildings, occupancy levels would reach 60 to 80 percent on average within three months.
“Dubai is seeing a sizable increase in the number of residents. Golden Visas tied to real estate investments are also just beginning to become popular. In addition, a large number of those recently purchased properties would also add to the Dubai rental market. Adding to the list of justifications for rising rent?
In Dubai’s real estate market, branded residences are not exactly uncommon. In order to profit, developers have teamed up with top fashion designers and hotel chains. DAMAC approaches things a little bit differently; for its most recent release of opulent mansions with five to seven bedrooms, the company recruited two “names.” Consider it an instance of double dipping.
The Swiss jeweler de Grisogono will be the brand for the exteriors of “Gems Estates,” while Roberto Cavalli will furnish the interiors. Hussain Sajwani, the creator of DAMAC, is the owner of both labels.
The Austrian “symbolist” painter Gustav Klimt served as the design inspiration for the villas at Damac Hills. The “shapes and curves, evidenced in the exterior of villas” are where this comes from. The dominant colors are gold textures and black diamonds.
Niall McLoughlin, the Senior Vice-President, noted that over the years, “our branded associations with names like Versace, Cavalli, and others have been highly sought after.”