Regional security and political issues such as Europe usher in wave of uncertainty
The price of apartment rents in Dubai fell by 6% in 1-H of Y 2016 as global and political issues hit investor and buyer confidence, a report by real estate website Bayut.com has found.
Dubai’s plummeting rental prices is 2X that of neighboring Abu Dhabi, which suffered a downward dip of 3%.
Studio apartments in Dubai saw the deepest shift in price, falling by 7% to an average of Dhs 57,000 in 1-H of Y 2016
Meanwhile, the average rent of 1-bed and 2-bed apartments in the emirate was calculated at Dhs 99,000 and Dhs 150,000, respectively, dropping by 4 and 6%.
The average rent of spacious options such as 3-bed and 4-bed apartments also fell by each in H1’15. Average annual rent for the 2 categories remained Dhs 205,000 and Dhs 310,000 in the 1st 6 months of the year.
Regarding property yields, studio and 1-bed apartments, being most popular housing categories, returned an average yield of 7%. The 2- and 3-bed apartments kept investors engaged with yields of 6 and 5%, respectively, while the 4+ bed category returned a mere 3% in rental yields in H1’ 16, Bayut found.
Larger properties took a harder hit in Abu Dhabi, where rents for studios grew by 2% to an average of Dhs 63,000in 1-H of Y 2016.
One-bed options saw a marginal drop of 1% to Dhs 97,000. Meanwhile, 2-bed and 3-bed apartments averaged Dhs 136,000 and Dhs 181,000, respectively, declining by 4 and 2% respectively.
The report read: “With the market moving into the second half of the year, global developments continue to weigh on the world economy. Regional security and political issues like Brexit have ushered in an era of uncertainty that is making investors and home buyers delay their spending decisions in some cases, resulting in the marginal loss of pace in vibrant real estate markets like the UAE.”
However, the report added that Expo 2020-related infrastructure developments would “remain continued drivers” for injecting capital into the real estate economy.
The report added: “Dubai and Abu Dhabi continue to be among the few rewarding realty markets in the world and will continue to do so in the near and distant future.”
By Eleanor Dickinson
Paul Ebeling, Editor
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