Rents on the rise across Dubai, reveals propertyfinder.ae

March, 2014: Good times are rolling for homeowners. Post the 2008 slump, rents in Dubai are bouncing back. The picture of accelerating activity in the leasing market has been reinforced by propertyfinder.ae, the UAE’s leading real estate portal, which has revealed year-on-year rises in rents across Dubai’s emerging and popular neighbourhoods.

Tracking rent rises across prime and up-and-coming communities, propertyfinder.ae has reported that whilst Dubai Marina and The Springs experienced a 27 percent and 30 percent year-on-year hike in rental values respectively, prices in Downtown Dubai – encircling the magnificent Burj Khalifa – also rose by close to 25 percent during the same period. Interestingly, rents in Dubai Sports City, an area that has risen in popularity recently, saw a dramatic 66 percent spike between January and February 2014 compared to renting prices in the first quarter of 2013.

Does this spell doom and gloom for renters? No, says Renan Bourdeau, Deputy CEO of propertyfinder.ae. “Over 35,000 units are expected to hit the market this year, with the majority of stock coming up in Dubailand, Dubai Sports City and Jumeirah Village, communities that offer good value. This will offer tenants the opportunity to rent in areas where their money goes further. Also, a key upshot of the upward pressure on rents may be that renters are encouraged to get a foot on the property ladder by purchasing for themselves, instead of constantly worrying about how much values will go up by next year,” said Bourdeau.

So, what impact will the roaring housing market have on rents? “Ultimately, the biggest influencing factor is supply and demand. The additional supply entering the market will have a ‘cooling’ effect on the rents. Moreover, in most countries around the world, people live in suburbs rather than in cities. However, up until a few years ago, there were only a handful of such addresses in Dubai. Today, parts of Dubai’s map that were once blank are being filled in by smart new mega developments built with a focus on phasing projects over many years in line with end-user demand. Whilst these areas may not have the desired infrastructure at the moment, as many more move into these neighbourhoods, development will follow. The growth in infrastructure will in turn increase the number of people wanting to live in these communities,” added Bourdeau.