Landmark Advisory releases July 2009 Dubai Leasing Map

The rent ranges published in the leasing map - available at Landmark Advisory website - are prepared by Landmark Advisory analysts, whose methodology combines transactional data with intensive mystery shopping and broker surveys.

July's leasing map shows continued marginal rent growth in select areas. At the same time, rents in other areas continue to fall; in some cases, considerably. According to Jesse Downs, director of research and advisory services, "rent declines are largely due to a combination of increasing supply and weak demand for specific areas or developments."

However, while relocations show definite trends, rent levels do not. The uneven movement of rents across Dubai points to continued volatility, as the market continues the process of price correction and discovery.

Ms Downs explained:

"Isolated rental adjustments are symptomatic of specific and transient patterns that are likely to stabilize in the short- to medium-term."

She added, "Observers should remember that current price movements are not necessarily indicative of broader market trends. It is still too early to call a price floor."

The relocation trends observed since Q109 are still prominent, which has translated into new discernable demand characteristics. "In other words," said Ms. Downs, "some relocation patterns lead to increased aggregate demand. New leasing demand is coming from people leaving shared accommodations in favor of acquiring their own units."

In addition, relocations continue from Sharjah and Abu Dhabi. When moving to Dubai, Abu Dhabi residents are motivated primarily by location, whereas demand originating from Sharjah centers on price. Al Qusais, however, is a notable exception to the price-driven demand from Sharjah. Due to its close proximity, Al Qusais has attracted many former residents, causing lower-limit rents to increase by Dhs10,000-15,000 for all unit-types.

Arabian Ranches is an example of area-specific rent changes that do not reflect the whole market. Rents for 2-bedroom villas in Arabian Ranches fell between Dhs10,000 (upper limit) and Dhs20,000 (lower limit) last month, while rents for larger units increased. 3-bedroom villa rents (lower limit), for example, rose by Dhs10,000, and 5-bedroom villa rents (lower limit) jumped by up to Dhs50,000. Trends in this area show a demand shift from smaller to larger units, also applies to the Greens.

In contrast to Arabian Ranches and the Greens, upper limit rents for studios and 1-bedrooms increased in areas like IMPZ and the Views, while upper-limit rents for 5- and 6- bedroom villas in Al Barsha have fallen sharply by Dhs60,000 and Dhs90,000.

At JBR, rents increased across the board, but especially for studios and 3-bedroom units, which grew by Dhs10,000 (upper and lower limit together) and Dhs30,000-45,000, respectively. Jumeirah Islands also saw rents increase, with 4-bedroom rents rising by Dhs10,000-20,000, and 5-bedroom rents climbing Dhs40,000-60,000.