The pace of decline in apartment rents in some sought-after areas of Dubai has slowed during March-April after recording steep falls in the beginning of the year, a research study by Khaleej Times and Asteco, a property management firm, reveals. The research finding, which was used to create the KT-Asteco Rental Monitor, suggests that while rents have dropped across the board from March to April, the average fall was in single-digits only, signalling that a probable market stabilisation trend may be around the corner. The findings suggest that rents haven’t changed significantly over the past month. The trend signals that rents are likely to stabilise in the coming months. Still, the possibility of further drops during the summer cannot be ruled out. In most cases, demand has been sparked by relocation needs and not by new tenants. Tenants sought to relocate or downgrade to more affordable residential units in a cost-saving initiative. This has created increased demand for studios and one-bedroom units. Apart from affordability, accessibility, and travel time are the other factors that drove demand. The research also reveals that demand for units in Discovery Gardens rose due to relative affordability and location advantage.
Another interesting finding is the flexibility shown by the landlords of accepting payment in 12 cheques. Most tenants, according to the research, prefer to renegotiate their contract or relocate within the same area to save moving costs. Most landlords also preferred to renegotiate, as they did not want to keep their property vacant for long time. Demand for studio apartments and one-bedroom units in International City, Discovery Gardens and Deira continued to remain high as people started downgrading residential status as a precautionary and cost saving measure. The average rent for a studio in International City is Dh32,000, down Dh3,000 from the rate prevailing in March. A two-bedroom apartment in JLT and newer developments in Dubai Marina including Manchester Towers, Marina Diamond dropped from a range of Dh75,000-95,000 to Dh70,000-90,000. In both cases, the fall has been less significant during the March-April period compared to the previous months. Rents for studio apartments in premium locations of Dubai such as Marina Promenade, Downtown Burj Dubai, Palm Jumeirah and World Trade Centre Residences have dropped by 8 to 14 per cent.