Rents Rise In Dubai’s Cheaper Communities

Dubai’s residential communities such as Dubailand, Dubai Sports City and Jumeirah Village Circle have seen increased demand owing to a rise in asking rents and sale prices, according to a propertyfinder.ae report.

International City moved up a position in the list of most searched locations to buy a property in Dubai while Jumeriah Village Circle jumped to the seventh position from 18 in the third quarter.

“This supports the observation that secondary locations are improving as end users and tenants look to relocate from prime areas to more affordable neighbourhoods,” said Renan Bourdeau, managing director and partner, propertyfinder.ae.

According to the report, there will be a supply of approximately 3,400 units in Dubai’s residential communities such as Jumeirah Park, Dubailand and Downtown Jebel Ali by the end of this year.

Dubai’s residential market has been recovering in line with the economic growth, improving demographics, government spending on infrastructure, increasing housing regulation and positive investor sentiment, the report said.

“With future stock that is expected to hit the market in 2015 also located in emerging neighbourhoods such as Dubai Sports City, Business Bay and Jumeirah Village, demand for sale and rental properties in these communities is likely to continue growing,” said Bourdeau.

Dubai’s property prices have risen almost 18 per cent in the third quarter this year, compared to the same period last year. Villa prices rose 14 per cent year on year, while apartment prices were up 15 per cent, according to a Jones Lang LaSalle (JLL) report.

“At the moment rents are controllable but if it continues to rise another 20 per cent in next nine months then there is cause for worry,” said Gaurav Shivpuri, head of MENA capital markets at JLL told Gulf Business earlier this month.

The IMF had warned Dubai earlier this year that the government might need to intervene in its property market to regulate prices and prevent another boom-bust cycle that brought the emirate to a brink of debt default.