Dubai real estate

Dubai real estate: Rents in prime areas fell over 20% in third quarter of 2023

Average rental prices in Dubai’s prime residential villa communities such as Jumeirah Golf Estates and Arabian Ranches saw a decrease between the third and second quarter of 2023

Dubai Marina and Palm Jumeirah saw a 13 percent reduction in rental values. Image: AFP

Dubai’s prime residential communities have seen a rent decrease of an average of 21 percent in the third quarter of 2023, according to a new report by Allsopp & Allsopp.

The report suggests that the rental market saw an increase in rental transactions during the summer this year, with Allsopp & Allsopp reporting a 20 percent increase in rental transactions, as well as a 29 percent rise in new rental client registrations from July to September.

Dubai real estate market sees new rise in total rental contracts in Q3 2023

In addition, a 9.7 percent increase was seen in rental viewings, and new rental property listings rose by 16.5 percent.

 

As per data by the Dubai Land Department (DLD), the Dubai real estate market saw a significant expansion as total rental contracts saw a 7.7 percent increase compared to the previous quarter.

Moreover, new rentals rose by 10.5 percent whereas rental renewals saw a 2.5 percent increase, which is attributed to the continuous rise in Dubai’s population.

“With high tenant demand and villa/townhouse rental transaction volumes across the more affordable communities we expect to see rental prices increasing across this segment well into Q4,” Paul Kelly, Operations Director for Allsopp & Allsopp said.

 

Popular areas such as Downtown Dubai and Business Bay saw a combined average increase of 33 percent in contracts and a 16.5 percent change in rental values in both areas.

In contrast, Dubai Marina and Palm Jumeirah saw a 13 percent reduction in rental values, despite Dubai Marina seeing a 19 percent in new contracts, compared to the same period last year.

However, Palm Jumeirah saw a 100 percent rise in new contracts, compared to same period last year.

 

Rent prices fall in residential villa communities such as Jumeirah Golf Estates (JGE), Arabian Ranches

Average rental prices in prime residential villa communities such as Jumeirah Golf Estates (JGE) and Arabian Ranches saw a decrease between the third and second quarter of 2023.

Jumeirah Golf Estates saw a 57 percent Year-on-Year (YoY) decline in average rental prices whereas Arabian Ranches saw a 27 percent YoY decline, between Q3 and Q2 of 2023.

 

However, in contrast to these declining villa neighbourhoods, communities like Dubai Hills Estate, Reem Ranches 3, Damac Hills, Town Square, and Mudon have seen growth, becoming new preferred destinations for residential communities, the report said, adding that despite the marked escalation in rental prices in these areas, ranging from 8-19 percent, the promise of an enhanced value proposition appears to be the decisive factor.

“The net result is a decrease in the average. Allsopp & Allsopp villa/townhouse rental price, as Q3 saw transaction volume across the more affordable villa/townhouse communities outweigh the luxury villa/townhouse rental segment (which had dominated transactions volumes/pricing for the first half of the year),” Kelly added.

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