Thursday, March 03, 2016

Dubai housing rentals to soften further in 2017

The residential rentals are likely to soften further next year, as more supply comes through, said Haider Tuaima, Head of research at ValuStrat.

Overall, Tuaima expects the real estate market to stabilize in some areas in the short term, with slight residential price recoveries, while “soft upturns” are likely to be recorded during second half of this year, continuing into next year.

Tuaima also said that real estate market in Dubai has been much affected by decline in global oil prices, and the investors are beginning to lose interest. He said rentals have slowed down largely due to demand and supply factors.

The real estate market in Dubai is comparatively young and is yet to go through mature real estate cycles to allow us to analyze historic trends.

Tuaima said that according to figures quoted by Dubai Land Department, Dh.267billion has been invested into Dubai property market last year, marking 22 percent growth over 2014. The data analysis by ValuStrat Price Index also reveal that no effective change in value has been recorded in second half of 2015.

The latest research from Cire, UAE associate of Savills, says that as per Tuaima’s forecast, prices and rentals in residential market in Dubai may soften in next 12 months.

Rental rates for prime apartments like DIFC and JBR have recorded the highest decline of nearly 4 percent in 2015, while villa rentals fell by two percent to eight percent.

A senior economist at National Bank o fAbu Dhabi said that rentals may probably drop further this year.

Last year, rental annual average fell at 2.5 percent, while in 2014, than annual average in 2014. And another 2 to 3 percent rent reduction is expected.

This year, overall rentals are likely to dip by 2 to 3 percent. The Dubai property market however, continue to remain attractive to investors, with industry data indicating growth in transactions and investment values in comparison to previous year.

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