The cost of renting an apartment or villa in Dubai is expected to be higher in 2013 as experts predict a rise of 10% or greater across the emirate’s rental market.
Craig Plumb, head of research, at real estate consultant, Jones Lang Lassalle Mena told Yahoo! Maktoob: "Rents will rise by 7-10% this year and in some areas it will be more than 10%. While 2012 saw a rent rise in established communities, 2013 will see a broader-based recovery."
Residential rents in Dubai increased by 17% over the past 12 months, a report by real estate consultancy CBRE said.Matthew Green, CBRE’s head of research, said: “For tenants, this is a warning flag. We don’t want to see the market overheat as has done previously."
RENT TRIGGERS
What could trigger a rent rise in 2013?
After years of plummeting prices and rents, Dubai’s real estate market is rebounding as the demand for housing increases. 2012 ended with a flurry of new project announcements, signaling that an increased confidence had returned towards real estate.
Ahmet Kayhan, CEO, Reidin.com, said: "Dubai’s economy is seeing a solid recovery due to a resurgence in the country’s construction and real estate sectors. The emirate is churning out more jobs and expats from different parts of the world are flocking in search of better opportunities. All this will result in housing demand and rent rises.”
A growing confidence on Dubai's revival was more evident on Tuesday as the emirate's stock market index hit a 34-month closing high. This was a result of foreign investors and funds showing an interest in investing in Dubai. The stock market rally was lead by Emaar Properties, a construction leader behind several prestigious properties and iconic towers in the region.
PREFERRED DESTINATIONS
On the backdrop of an expected rent increase this year, tenants are more likely to be attracted to localities with quality units and amenities.
Plumb from JLL said: "Residential rents in established locations such as Downtown Dubai, Dubai Marina and Palm Jumeirah will rise in 2013. Popular communities including Greens, Meadows, Lakes and Springs, which have facilities such as schools and hospitals in the vicinity, will also witness higher rent rates."
Meanwhile, CBRE predicts more demand in master communities such as Emirates Living, Palm Jumeirah, Downtown Dubai, Dubai Marina, Jumeirah Lakes Towers and Arabian Ranches.
According to the report, 36,000 new apartments and villas could enter the market from 2013 to 2015 if construction delays are minimal. Most of the residential supply is expected in locations including Dubailand Residences, Motor City, Dubai Sports City and Liwan.
MAJOR RESIDENTIAL COMPLETIONS OF 2012/13
Image Source: JLLREAL ESTATE REGULATIONS
Earlier this month the UAE authorities announced a spate of possible property regulation aimed at cooling prices and eliminating speculators from the market, which could have sent rents spiraling in 2013.
But the Central Bank announced that the proposed cap on mortgage lending - for expatriates at 50% of the property's value and 70% for nationals - would now not happen until the second half of the year.
Plumb from JLL, said: "If the mortgage cap was introduced, buyers would have put purchases on hold and opt to rent out instead, thereby increasing rents in the emirate. But with lending restrictions on hold for now, we could see more property transactions happening and perhaps rising prices."
"A surge in transactions is inevitable with the proposed rule on hold, but it will definitely work against the government's intention to bring more stability in the property market by avoiding any rapid rise in prices," Plumb added.RELATED GALLERY: Top Ten Most Popular Rental Locations In Dubai
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Once again in first place, Dubai Marina solidifies its position as the area most people are interested in renting in. Real estate agents say its popularity is due to having the most complete lifestyle in Dubai with beach, metro, shops and nightlife in close proximity. less
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1 comment:
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