HOW DUBAI RENTAL MARKET IS MAKING A STRONG COMEBACK

The COVID-19 pandemic brought significant changes to Dubai's economy and real estate market. However, in 2021, the Dubai rental market showed a strong recovery as the economy recovered after the successful implementation of the vaccination program and the reopening of international borders.

The industry experts say that the rents in Dubai will rise substantially because of increased demand, particularly in the luxurious and beachfront properties. The demand for waterfront villas, apartments, and townhouses will stay strong, and rents will rise because of the lack of supply.

This article will provide detailed insights into the Dubai rental market and varying factors that impact its performance. Read through to get familiar with the rental property market of Dubai and make an informed investment decision.

Dubai Rental Market Outlook For 2022

According to a Valustrat report, the rents in Dubai are expected to increase in the year 2022. However, the prices are more likely to rise at a slower pace compared to 2021. Properties located at prime locations with high demand may witness a double-digit surge.

The experts estimate that the villas in Dubai will stay in high demand, resulting in high rental prices for villas than apartments. The rent for apartments in Dubai may see a slight increase in 2022 because of the rising trend of holiday homes in the region.

The villas witnessed a sharp increase in rents and prices as well-developed villa communities became limited and the supply shifted toward central locations.

On the whole, an increase of five percent to seven percent in rental prices is expected for apartments and seven to ten percent for villas.

Some popular apartment areas include Emaar Beachfront, Port De La Mer, and Dubai Creek. The upcoming project of villas, namely Tilal Al Ghafi and Amalfi Estates is likely to attract the interest of potential buyers.

All in all, Dubai real estate market will see a surge in rents and prices in 2022, but the rate of increase may be slower than in 2021.

Does Dubai Rental Market Need Some Catching Up To Do?

The Core report tells that the rents of apartments in Dubai Sports City and Discovery Gardens considerably declined last year. The rents in suburban districts are most likely to stay under pressure due to the projected high supply of apartments in 2022.

The Dubai rental market still needs to catch up as people are more inclined toward property sales. The high demand for complete or nearly ready homes indicates a shift in preference of Dubai residents from the rental market to buying their own homes.

Several projects are expected to be delivered this year, including Emaar, Azizi, and Damac. The Dubai rental market will experience pressure from sales as more residents prefer owning their houses despite the rising mortgage rates. The residential market of Dubai will continue to be led by users motivated by the decreasing interest rates and loan-to-value ratios alongside the social and economic reforms.

Projections Of Dubai Rental House Prices In 2022

Dubai rental property market is most likely to pick up as the economy recovers and improves after the successful execution of the vaccination program. It is predicted that the rents and capital values of villas in high-demand prime locations will reach and exceed 2014 peak levels.

According to a ValuStrat report, the rents and prices of apartments will stabilize in the second half of 2022. This stability will come due to an oversupply of apartments in the coming years, especially within the E311 and E611 highway corridors.

Also, the report highlighted that the demand from foreign investors may increase as travel restrictions are eased. It indicates that the Dubai rental market will see an upward trend in 2022 because of the rise in demand from international and domestic investors.

The Dubai VPI for housing rental values raised 6.7 percent quarterly and 18.9 percent yearly, reaching 67.3 points, which is the highest increase in rental prices since 2014.

Popular Dubai Rental Locations In 2022

Some rental locations in Dubai may see a sharp increase or steady increase in their rents depending on their popularity and demand. Dubai South and Dubailand are highly budget-friendly locations in 2022 since the developed communities began showing stability in the demands of the landlord for higher rents.

Besides, locations like Jumeirah Lake Towers (7 percent year-on-year increase), Business Bay (9 percent), and Dubai Marina (11 percent) saw significant increases during the year 2021 and are likely to rise more. On average, Downtown Dubai rentals witnessed an 11 percent increase, whereas well-developed residential areas like Greens and The Views saw rent gains of approximately 20 percent.

So those looking for lower rents may need to consider far-off locations like Dubai South and Dubai land. Dubai South has a considerably higher number of newly developed homes ready to be delivered in 2022. Similarly, Dubailand offers new studios and one-bedroom apartments on rent for Dh 28,000 to Dh40,000 on average.

Thus, residents may have plenty of options to select from living in Dubai. However, there may not be enough time to make your decision as the rents at popular residential locations are changing every month. This is one of the reasons for the Dubai rental market balancing out and favoring landlords after staying tenant-friendly for years. But rental surges may not be consistent city-wide owing to COVID-19 restrictions.

The Bottom Line

As things get back to normal, the Dubai rental market will continue to see a steady rise in rentals in 2022. It is especially true for newer and quality buildings in different areas of Dubai that will witness a surge in rentals.

However, apartments located in old Dubai may see a further decline in rents. The rental growth in the villa market is higher than the apartment's rental rates. The rents of properties in prime locations will see a sharp increase in the rental rates during 2022. Overall, there will be a moderate rise in the rental market, especially in prime locations where projects offer high-quality units, modern services, and amenities. Furthermore if you are looking for detailed advise on the Dubai rental market you can get in touch with the experts at the Inspire real estate one of the most famous names in the property market of Dubai.