The second quarter of 2021 brought recovery in the market. However, growth was uneven. Some segments strengthened, others hit all-time highs, while a few ones recorded slight declines.
Average apartments rental rates rose by 3% during the April to June period. Meanwhile, average villa rents jumped by 8%.
On a yearly basis, apartments rents dipped by 3%, while those for villas advanced by 10%.
There was an increased demand for more spacious properties. The greatest portion of interest came from people working from home and interested in a comfortable workspace.
Rents in Dubai’s popular areas, such as Dubai Marina and Jumeirah Beach Residence, increased slightly, while villa rates in The Arabian Ranches and Victory Heights saw a double-digit increase.
Analysts find it challenging to give a long-term forecast to what extent the recovery will continue. However, the upcoming Expo-2020 is expected to boost a short-term rise.
At least, the prospects cover the period of up to 2022, six months following the exhibition and the residual effect on the market.
Apartment rental growth is expected to continue to lag villa rentals until the end of 2021.
The focus is also on the problem of new properties’ supply glut.
At the beginning of the year, overall expectations for the number of properties to be constructed were between 60,000 and 83,000. However, only 18,616 units have been completed so far, with 37,466 properties’ completion scheduled for the year’s end.
Some analytical companies, consulting and brokerage firms point to a trend emerging by the third quarter with tenants increasingly interested in extremely short-term contracts for the period of two weeks to two months.
The reason is the lack of confidence among new buyers whether they want to buy real estate in the UAE. It is also possible that many of those tenants are looking for temporary housing while planning to move to Dubai for a longer period.
Expo 2020 Dubai is said to be the other reason. Many people interested in attending this event hardly see the point in longer-term rental contracts. Perhaps they will change their mind upon arrival. However, this is what we see currently.