Dubai: Can you name the Top 2 best-performing residential locations in the city in terms of rental gains so far this year?
The Palm Jumeirah is an obvious choice, but if any of you brought up Dubai South as well, then full marks to you.
Listing for two-bedroom apartments at Dubai South show a broad range, from Dh55,000 and going past Dh80,000 if the landlord has provided much of the furnishing and fitouts as well. At the Expo Village, the asking rents tend to be higher, and these units also tend to offer more space.
Now, if the prospective tenant’s choice is for a 1-bedroom unit at Dubai South, the range comes to Dh40,000-Dh55,000 based on the listings.
In fact, broker sources say the number of listings at the ‘city-inside-a-city’ have seen a significant drop since April/May. And that by October, most apartment buildings there would show limited availability.
The same is true for Dubai’s other mid-market communities, with Motor City, Remraam, Green Community at DIP, Dubai Production City all figuring in the Top 10, based on the ejari contracts. Jumeirah Village Circle is there too.
Among the luxury/upscale residential destinations, Sobha Hartland makes a break into the Top 10, while the Palm and Dubai Hills Estate remain the top choices.
“Dubai Hills Estate and Meydan City are another two newer communities that have shown significant growth this year,” says the GCP-Reidin report. “Along with Dubai South and Sobha Hartland, they make up a quartet that prove that newer communities can compete with their older and more established peers, beating out Business Bay and Jumeirah Beach Residence to make the list of top performers.”
Market sources say while price gains on property are showing signs of stabilising in Dubai – though selectively – the upward pressure on rents will not abate any time soon. They point to the job market, which continues to run strong, demand for offices, which is on the recovery path. The Dubai Chamber’s half-year data shows more new companies making an entry, and that too is a trend with long legs.
All of which play out in the rental market, where according to the GCP-Reidin data, ‘Studios and four-bedrooms have seen greater (rental) growth in newer communities, but in the 1-, 2- and 3-bedroom apartments - which account for 82.45 per cent of all apartment transactions this year - the older communities have seen slightly more (price) appreciation’.
Dubai: Rents in Dubai may be showing signs of some sort of levelling off, but the same is definitely not happening on property sales values for now. The average value on residential deals have seen a 17 per cent rise in the last 12 months, with the April-June period alone packing in a near 5 per cent gain, according to the consultancy Knight Frank.
And if it’s a luxury home that an investor is planning to buy now, he or she would have to reckon with an eye-watering 125 per cent increase in asking prices that Dubai’s poshest neighborhoods have seen since January 2020.
If any of these prospective buyers are hoping to see signs of a cooling off, they are not getting it. “As things stand, the relatively long-run of price growth is showing no signs of slowing,” said Faisal Durrani, Head of Research for Middle East and Africa at Knight Frank. “If anything, all the market dynamics continue to point toward further increases, particularly when it comes to villas as the supply-demand dynamic remains out of kilter.”
For instance, at Jumeirah Bay Island, Emirates Hills and Palm Jumeirah, villa prices were up 11.6 per cent in Q2-23 and an ‘extraordinary 125 per cent’ since January 2020. “What’s more, just 8 villas are currently under construction in these neighbourhoods,” said Durrani.
Which should divert buyer attention to other upscale locations in Dubai, with Dubai Hills continuing to garner a lot of the attention. So is Majid Al Futtaim backed ‘island’ developments at Tilal Al Ghaf. A new possibility will emerge through Emaar’s brand new ‘The Oasis’ community.
Copyright © Property Concierge Ltd. All Rights Reserved.