Apartment rental rates in Dubai saw minor increases in February, while there was significant fluctuation in Abu Dhabi rents, according to a new report.
Real estate website Bayut said that with the addition of new units over the past few months, the market is becoming more affordable for both buyers and renters.
According to Bayut.com, the average rent in Dubai rose from AED114,000 to AED115,000 last mohth while rental rates in Abu Dhabi slumped by 8 percent, settling at an average AED110,000 in February.
In Dubai, Bayut said that as a number of units in the pipeline are gradually making their way into the market, renters are “generally happy” as the market is supplying more bargains and some landlords are willing to negotiate on rent.
However, the average yield is still 6 percent, outperforming real estate investments in comparable cities, the report noted.
The average price for a studio apartment remained steady at AED667,000 while for 1-bedroom apartments, the average rent was down 3 percent to AED87,000 compared to the previous month despite sale price rising to AED1.32 million in February.
Two-bed units in the emirate commanded an average rent of AED137,000 in February and a selling price of AED2.25 million, while the average sale price of a 3-bed apartment in Dubai shed 2 percent of its January value to settle at AED3.5 million. There was a similar drop in the average rent for 3-bed apartments, down to AED188,000 in the outgoing month.
The average rent for the 4+ bed category remained at AED314,000 in February, the report added.
Bayut said in Dubai, the changes in values have been more pronounced in areas in or close to the city centre, as a newer lot of quality structures keep pulling tenants and buyers out to the city’s suburbs.
While rents in Dubai mostly held their ground, values came down noticeably in Abu Dhabi in February.
The greatest downward movement was observed in rental rates of studio units, with average rent recorded at AED44,000, down from the January average of AED48,000.
One-bed units shed 5 percent of their rental value in February to settle at AED81,000, while 2-bed apartment rents averaged AED118,000. The average rent for 3-bed units in the UAE capital was AED164,000 per annum according to data analysed in February, while bigger units in the 4+ bed category also saw a rental price decline of 3 percent to AED217,000.
Bayut said: “Considering the global headwinds most economies are braving, and the effect on liquidity as a result of the ongoing oil price crunch, the performance of real estate markets in the two main cities of UAE appears satisfactory. While many regional realty markets remain in a nosedive, Dubai and Abu Dhabi have held their positions well.”