Citing the report, UAE-based Al Bayan states that the entry of thousands of new housing units into the property market through developmental projects announced during April is being seen a reason for the drop in rents.
The entry of new real estate units into the market allows for more alternatives for tenants and increases the confidence of property developers in the market. This makes quietness the market’s main feature during the current period, which put relative pressure on prices.
The report points out that around five large residential projects were announced in Dubai, all during the month of April. These targeted the rental and sale sectors and are expected to introduce thousands of housing units to the real estate market in Dubai, which could put pressure on leasing rates further in the future.
The report states that the Dubai real estate market has become the most attractive for investments in the region due to the emirate’s strong regulations, which ensure the rights of all stakeholders and provide attractive returns on investment. Dubai is also a safe haven for property investors in the region, it adds.
“A large number of projects, which were announced recently, clearly show the confidence of property developers in Dubai,” Standard Real Estate CEO Abdul Karim Hassan Al Mulla says.
He adds, “Affordable housing projects, which are the talk of the town, show this segment is being accepted very well. I believe it’s a new trend and the real estate market’s stable condition is attracting more Emiratis, especially the young population. Special incentives provided by property developers in the emirate, which include reduced prices and flexible payment plans, helped attract a new segment of local investors.”
Al Mulla also considers the country’s win of the Expo 2020 as a major attraction for more property investors. The stability in the real estate sector is healthy in the long-term, he adds.
A report by property consultants JLL predicted in January that average house prices and rents in Dubai would fall 10 per cent during 2015 owing to a lack of affordability in the market and the recent global oil price crash, while Standard & Poor’s said they would fall 20 per cent because of increased supply and weakening investor sentiment triggered by the tumbling price of oil.
The real estate broker CBRE reported that, after massive falls and unsustainable growth over the past decade, housing rents in Dubai remained stable for the third quarter in a row. CBRE also stated that rents in the city remained unchanged during the previous quarter, with most areas experiencing changes, which varied between falls of 1 per cent and increases of 3 per cent.