The cost of renting an apartment in Dubai fell 4% quarter on quarter in Q2 2018, according to Chestertons’ Observer: Dubai Market Report Q2 2018.
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Villa rentals were down 2% over Q1, while sale prices for apartments were down 1% and villa prices remained flat during the same period.
“Affordability has undoubtedly been one of the top trends so far this year,” said Ivana Gazivoda Vucinic, head of consulting and valuations and advisory operations, Chestertons MENA.
“What we’re witnessing, especially with the large amount of supply entering the market, is that developers are focusing on the investment-active, mid-market segment through a range of flexible payment options and smaller units to keep prices attractive; piquing the interest of would-be investors.”
By area, the biggest decline in rates was seen in Dubai Sports City, where rents fell 7% from Q1. A typical one-bedroom unit in the area can now be rented for around AED 57,000 per annum.
Motor City and Jumeirah Lake Towers saw quarter on quarter drops in rental rates of 6%, with one bedrooms now typically going for AED 71,000 and AED 77,000.
The biggest rental declines on villas were seen in The Springs and Victory Heights, where rates fell 4% over Q1.
“The average decline in rental rates can be attributed to several factors, including greater choices at reduced prices. The focus for developers and landlords going forward should be on quality, as tenants proactively seek out cheaper options or move to better quality units for the same price as their existing units,” said Vucinic.