Experts continue to summarize the results of the Dubai market in the first half of 2023. General statistics from the rental segment became available: how much the fee has increased in different areas and where it is most profitable to rent an apartment or villa.
If we take the average values, then in the first half of 2023 it has already grown to 50% in some residential areas. In the luxury real estate segment, rent growth was up to 70%, especially when it comes to the most sought-after areas of Dubai and the most expensive residential complexes.
Most analysts believe that rents will continue to grow at least until the end of the year. Although certain factors may slow down its growth. Nevertheless, real estate investors can still take advantage of many profitable opportunities.
Content:
- Where do people want to rent real estate?
- It is more profitable to rent a cheap apartment
- An area with luxury apartments
- Where is it more profitable to rent a villa?
- Where to rent an expensive villa?
- When will the situation stabilize?
Where do people want to rent real estate?
Among tenants who are looking for housing for rent at a reasonable price, the most popular areas turned out to be as follows:
- Bur Dubai;
- Jumeirah Village Circle (JVC);
- DAMAC Hills 2;
- Mirdif.
Among these areas, all except Bur Dubai belong to suburban areas.
Among wealthy tenants who are looking for luxury real estate, the areas in the city center are in the greatest demand. The areas are as follows:
- Dubai Marina;
- Business Bay;
- Dubai Hills Estate;
- Al Barsha.
It is more profitable to rent a cheap apartment
In the segment of apartments, among the areas with relatively affordable rentals, Jumeirah Village Circle (JVC) is in the greatest demand. In the first half of 2023, apartment rents here increased in the range of 15% from 18%, depending on the specific residential complex.
According to Dubai Land Department (DLD), the average annual rent here increased by 7.76% and amounted to AED 52,000 ($14,210).
For certain types of real estate, the situation is as follows:
| Type of apartments | Price, AED | Price, $ | Rental growth |
|---|---|---|---|
| studios | 44,000 | 12,000 | 17.2 % |
| 1-bedroom | 63,000 | 17,150 | 16.9 % |
| 2-bedroom | 88,000 | 24,000 | 15.4 % |
An area with luxury apartments
Those who are ready to rent expensive apartments are most often looking for real estate in Dubai Marina. According to the results of the first quarter of 2023, Dubai Marina is in the greatest demand.
The average annual payment for an expensive apartment here was AED 104,800 ($28,530), showing an increase of 7.01%. The growth of the already high price may be due to the fact that landlords are in high demand and set inflated prices, analysts say.
For certain types of expensive apartments, the average prices were as follows:
| Type of apartments | Price, AED | Price, $ | Rental growth |
|---|---|---|---|
| 1-bedroom | 107,000 | 29,130 | 13.5 % |
| 2-bedroom | 155,000 | 42,200 | 8.56 % |
| 3-bedroom | 247,000 | 67,250 | 10 % |
Where is it more profitable to rent a villa?
Among tenants looking for affordable villas, DAMAC Hills 2 is in the greatest demand.
The average annual rent for an inexpensive villa is AED 70,900 ($19,300). The rent growth was 11.8%. For specific types of real estate, the situation is as follows:
| Types of villas | Price, AED | Price, $ | Rental growth |
|---|---|---|---|
| 3-bedroom | 77,000 | 21,000 | 18 % |
| 4-bedroom | 101,000 | 27,500 | 41.1 % |
| 5-bedroom | 121,000 | 33,000 | 13.3 % |
Such a rapid rise in the cost of renting four-bedroom villas is associated with the appearance of Casablanca Boutique Villas, Acuna and Mulberry. Due to high prices in new projects, the average price for four-bedroom villas in DAMAC Hills 2 has increased dramatically.
Where to rent an expensive villa?
Finally, among the areas with expensive villas, tenants most often choose Dubai Hills Estate. The average annual rent is AED 261,300 ($71,140). The rent growth was 1.96%.
| Types of villas | Price, AED | Price, $ | Rental changes |
|---|---|---|---|
| 4-bedroom | 319,000 | 86,850 | growth by 2.96 % |
| 5-bedroom | 394,000 | 107,270 | decrease by 1.53 % |
| 6-bedroom | 1,770,000 | 480,000 | growth by 25.9 % |
Such an increase in the average rent of six-bedroom villas is associated with the appearance of Golf Place and Fairway Vistas projects in the area. Lots of wealthy buyers turned out to be investors and began to rent out villas after the purchase.
When will the situation stabilize?
As mentioned above, experts do not expect an early reduction in rental prices. However, the situation may be affected by at least one innovation developed by DLD. In order to regulate prices, it was decided to replace the current rental index with a rating system.
If earlier the index was determined mainly due to the location of the object, now it will be compiled based on user reviews. People will evaluate various aspects of life in a particular building and give a rating from one to four stars.
In properties with a high rating, landlords will be able to raise fees as much as they want. But for buildings with a low indicator, you will have to go to Real Estate Regulatory Authority for permission.
Most experts believe that the new system will not stop the price increase, but it may slow it down somewhat. At least in the segment of apartments. After all, there are no plans to introduce a new index in the villa segment yet.