The rental market in Dubai continued its upward trend this year as average rents surged 27.7 per cent during the first two months of 2023, according to latest report.
The CBRE Dubai Residential Market Snapshot noted that average apartment and villa rents increased by 27.9 per cent and 26.3 per cent, respectively.
“The average annual apartment and villa asking rents reached Dh99,737 and Dh295,436, respectively, as of February 2023. The highest rental rates for both apartments and villas have been seen in Palm Jumeirah, with average annual rents reaching Dh260,467 and Dh1,017,614, respectively,” according to the report.
“We have seen that tenants are more likely to renew their existing leases, where based on Ejari figures, the number of new registrations year-on-year in the year to date to February 2023 has decreased by 13 per cent, whilst the number of renewals has grown by 30.7 per cent,” Taimur Khan, head of research for Mena at CBRE in Dubai, said.
Ata Shobeiry, chief executive of Zoom Property, said the rental market is expected to continue its upward trend in coming months.
“Driven by many factors, such as population growth, increased demand for housing, and the city’s reputation as a global business hub, the average rent in Dubai continues to increase at a significant pace, as it recorded a jump of over 27 per cent in 2023 so far,” Shobeiry told Khaleej Times on Thursday.
“Taking the recent numbers into consideration, I foresee the rental market continuing its upward trend as Dubai continues to attract visitors,” he said.
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Residential market growth
The residential market also continued its strong growth momentum as the emirate recorded 43.9 per cent year-on-year increase in sales transactions last month as it recorded 8,515 transactions, reflecting the highest February figure on record. This growth has been underpinned by a 78.1 per cent increase in off-plan market sales, along with an 18.8 per cent increase in secondary market sales, according to the report.
The emirate recorded 17,741 residential transactions in the year to date to February 2023, which is also the most on record during the first two months of the year.
“In February, we have seen the strong start to the year, in demand terms, continue in Dubai’s residential market, with the total volume of transactions reaching the highest total recorded in the first two months of the year,” Khan said.
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Average prices up
The CBRE report recorded 11.5 per cent increase in property prices during the first two months of 2023 and said average apartment and villa prices rose by 11.2 per cent and 13.6 per cent, respectively.
Average apartment prices in Dubai reached Dh1,211 per square foot, and average villa prices climbed to Dh1,432 per square foot in February. These average rates still sit below the highs witnessed in late 2014, with apartments and villas remaining 18.6 per cent and 0.9 per cent below this peak. However, several communities have already surpassed their 2014 figures, according to the report.
In the apartment segment of the market, Jumeirah registered the highest sales rate per square foot, reaching Dh2,388, whereas, in the villa segment of the market, Palm Jumeirah registered the highest sales rate per square foot, reaching Dh4,309.
“About 17,741 residential transactions have been registered in the year to date to February 2023. This record level of activity is supporting growth in average prices, where in the year through February 2023, average apartment and villa prices have increased by 11.2 per cent and 13.6 per cent, respectively,” Khan said.