Samir Salya discusses further rental drops in Dubai

Although it’s difficult to accurately pinpoint, it looks as though a recovering in the rental sector in Dubai could take until next year. Even then it seems the rental recovery will only be relevant to a few, select, locations.

It’s projected that there will be further declines in rents across the freehold clusters in Dubai before they start to stabilise sometime in 2018. When this does happen, experts predict that rents in secondary areas will continue to struggle.

Dubai’s freehold properties still in demand

A new report from Core Savills predicts shows that rental changes have had little effect on the demand for Dubai’s freehold properties. But falling rents have slowed the sales value recovery.

The report says that: “Although yields have contracted, they are still northwards of 7.5 per cent for most apartment districts and 5.5-6 per cent for mid segment villa districts — relatively higher than other forms of investments in the region.”

The agency also said that they predict that locations such as Jumeirah Village and Discovery Gardens will continue to struggle with rental rate pressures. This is due to the communities that have sprung up nearby that are offering newer amenities and better value for tenants.

Exclusive areas with brighter outlook

In other, more expensive areas, there is a brighter outlook for rental forecasts. The towers at Dubai Marina and JLT look set to do well, and the best opportunities will be in Jumeirah.

The real estate performance for Dubai in the first half of 2017 has been relatively positive. The market has been able to attract investors and end-user buyers have been steady. However, the huge number of new off plan launches that have happened recently, and with more on the way, is raising concerns from many areas.

About Samir Salya

Samir Salya is the Chairman of Reign Holdings and is involved in real estate and construction within the UAE and UK. Samir holds over 20 years of experience in executive management, business expansion, performance improvement, sales and marketing.