Property rental rates in Dubai are fluctuating wildly as renters enjoy a glut of available homes, a leading industry analyst said yesterday. People looking for a new home had become more discerning and were able to pick and choose the best flats and villas as supply rocketed, said Jesse Downs, the head of research at the Landmark Advisory, a division of Landmark Properties.
Her assessment came as Advisory released its fifth leasing report into market trends in Dubai. The study found an uneven pattern of rents across the emirate, but an increase in the number of people moving to Dubai to take advantage of low rents and high supply. The extra space was due to people leaving the city to escape the summer heat or because of job cuts in the credit crunch, combined with a number of new property developments being finished, the report said.
Prices varied significantly, with one-bedroom apartments in Dubai Marina costing between Dh55,000 (US$14,970) and Dh115,000 a year to rent, the report revealed. Two-bedroom flats in Jumeirah Lake Towers are being rented for between Dh68,000 and Dh120,000 while three-bedroom apartments in Jumeirah Beach Residence are going from Dh150,000 and Dh200,000. "Pricing trends are a bit chaotic in Dubai at the moment," said Ms Downs. "Some are rising and some are falling within the same geographical areas.
"Previously, housing was based primarily on location but now there are a whole other set of factors which are influencing people. "People are looking at what amenities are available, how complete the development is and the quality of the construction, both in terms of design and functionality." Ms Downs said the increase in supply was driving down prices and poorer-quality homes were remaining empty.
"Consumers are in the driving seat. They are being more selective about what they are prepared to accept." Andrew Chambers, the managing director of Asteco, the UAE's largest property services firm, agreed that the Dubai market could not be as easily categorised by geographical region. "People are now quite discerning, because the market in Dubai gives them real choice," he said. "Before there was such competition for properties that people would take the first thing they saw. Now they have a chance to see a few properties. They can pick and choose.
"The properties which are particularly vulnerable are those which are poorly finished or designed or have poor access. "If people have to go through a building site to get to their new home, they shy away from those properties. Who wants to live in a building site?" Landmark Advisory said the fluctuating prices were part of the price correction process. "The uneven movement of rents across Dubai points to continued volatility, as the market continues the process of price correction and discovery," the report said.
Ms Downs added: "Isolated rental adjustments are symptomatic of specific and transient patterns that are likely to stabilise in the short to medium term." She said many existing Dubai residents were taking advantage of the falling prices to upgrade to a larger or better-quality home, while other people who shared a home to save money were now able to find a place of their own. Others who were forced to move out of the city to districts such as Sharjah owing to the previously high prices were coming back.
The new data come weeks after Asteco published its second-quarter property figures, which showed villa rents in Dubai had fallen by almost a quarter in 12 weeks, while apartment rents dropped by more than a fifth in the same period. chamilton@thenational.ae