by admin
According To Data from CBRE, the Average Rent In Dubai Increased Year Over Year To 24.8% in August 2022 From 23.7% A Month Earlier.
As per predictions, rents in Dubai are expected to begin to level off in near future because of increased supply. According to CBRE data, Dubai’s average rent increased year over year in August 2022 from 23.7% to 24.8%. According to Taimur Khan, head of research Mena at CBRE in Dubai, “the growth rate of rents, on a month-to-month basis, has now slowed for three consecutive months. Indicating we may see the renting rate of growth start to moderate in the not-too-distant future.”
Average rent increased by 24.8% from August 2021 to August 2022. Average rents for apartments rose by 24.9 percent during this time. While those for villas rose by 24.2%. According to Khan, the average annual rent for an apartment was Dh87774 and for a villa was Dh263034.
The Palm Jumeirah neighborhood’s average rent of Dh222870. Moreover, Al Barari’s average rent of Dh935046 respectively had the highest annual rents for apartments and villas. According to Ata Shobeiry, from Zoom Property, the rise in average home prices across all market segments shows that the Dubai real estate market will continue its bullish trend into the second half of the year. The market will not be impacted by global challenges and will end the year on a very strong note. Even though average prices have not yet reached the peak levels of 2014.
Moody’s Prediction
According to Lahlou Meksaoui, a market analyst at Moody’s Investor Service, due to high supply, particularly in Dubai, average rents will remain stable throughout the UAE in the upcoming 12 to 18 months. Emaar Properties completed the Dubai Hills Mall, for instance. Which has a gross leasable area (GLA) of around 2.0 million sq. ft., in February. “Declining consumer confidence brought on by rising inflation will continue to be a threat to tenant sales. Which are the primary source of rent for retail landlords.”
Because Grade A office buildings are in high demand and there aren’t many of them available. Moody’s anticipates modest average rent hikes for DIFC Investments and Aldar Rental Units in the office sector. The most recently finished office buildings, according to JLL, are Grade B developments, which are less popular. “Because of the pandemic, employee preferences have changed, leading to more people looking for flexible space options and higher-quality office buildings. Therefore, we anticipate that high-quality office buildings will report lower average occupancy rates than the remainder of the market.
In the upcoming 12 to 18 months, Moody anticipates that average residential prices will stabilize. Alternatively, moderately soften, restrained by the ongoing supply of new homes. According to Jones Lang LaSalle (JLL), an investment in real estate and advisory firm, 58,000 new residential units will become available in Dubai this year, making up about 9.0% of the current stock.
In Comparison to Abu Dhabi
In contrast, Abu Dhabi will complete 9,000 units in 2022 or about 3.0 % of the current stock. Because Abu Dhabi’s demand and supply dynamics are more balanced than those of Dubai are. We think the future supply there will be simpler to absorb.
There were 9,257 total transactions in the Dubai residential market in August, up 70.5% from the same month last year. Off-plan and secondary market sales increased by 68.5% and 72%, respectively, during the same period. The total number of transactions from the start of the year until August 2022 reached 55,108, highest number since 2009.
In the 12 months leading up to August 2022, average prices increased by 8.8%. While average apartment prices increased by 7.7% and average villa prices increased by 15.8%.
The average price of an apartment in Dubai is Dh1120 per square foot. While the average price of a villa is Dh1339 per sq. ft. These average rates are still below the peak of 2014. However, apartments are currently 24.7 % and villas are currently 7.35 below this peak.
The greatest average sales rate per sq. ft. in the market for apartments was recorded at Jumeirah. Which sold apartments for Dh2152. While the highest average sales rate per sq. ft. in the market for villas was recorded at Palm Jumeirah. Which sold villas for Dh3588.
“Dubai’s residential market saw a total of 9,257 transactions in August, making it the fifth-highest monthly total ever. Despite the challenging global economic environment and what is typically a slower time for transactional activity, transactional activity in the sector has continued to outperform expectations. In the year to August 2022, average price growth slowed to 8.8%. Down from 9.9% a month earlier, because of rising mortgage rates, both promotional and post-promotional.
