Thursday, June 24, 2010

Falling rental values in Dubai lead to high demand for villas

With the declining rental values, villas in Dubai are much in demand from potential tenants now.
The Managing Director at Harbour Real Estate, Mohanad Alwadiya, said that villa rentals seem attractive at the moment. But, with more villas likely to enter the market, rentals are likely to decline, although at a slow pace.

Harbour Real Estate said that an estimated 3500 to 4000 villas are likely to enter Dubai by the year-end. This could lead to 10 percent drop in villa rents. But villas are strong assets for Dubai, and the demands for villas are always likely to be higher than apartments.

The Manager - Residential Sales & Leasing at Better Homes, Kosta Giannopoulos, said that it is difficult to actually quantify by how much villa rentals are likely to decline, but due to rise in supply with the handover of more projects such as the Jumeirah Village, Lavan, Shorooq, The Villa, Cedre Villas etc., the stagnation of demand, there is likely to be constant downward pressure on rents.

In Dubai's Mirdiff area, a four bedroom villa with an area of 3000 square feet is being rented out for about Dh.120,000 per annum. Rentals for a four bedroom in Dubai are Dh.136,000 per annum for a 4,101 square feet space in Dubailand and Dh.150,000 per annum for 5,600 square feet at Umm Suqeim.

With more villa projects entering Dubai, it is likely that prices will continue to decline at a slow pace. For instance, the Mirdiff villas recorded a 15 to 20 percent decline in recent times, mainly due to handover of the Shorooq Villas, Alwadiya said.

Alwadiya said that in Mirdiff, rentals for four bedrooms range between Dh.115,000 per annum and Dh.180,000 per annum, while five bedrooms range between Dh.130,000 per annum and Dh.210,000 per annum. A triple bedroom villa in Mirdiff area with 1590 square feet space currently attracts a rental of Dh.80,000 per annum.

The villa rentals are in the range of Dh.120,000 to Dh.150,000 per annum for a double bedroom villa at Al Warqaa, Dh.140,000 to Dh.180,000 for triple bedroom villa rental and in Springs triple bedroom rentals are in the range of Dh.110,000 per annum to Dh.175,000 per annum.

No comments: