UAE rent prices to remain unchanged in 2017by Jumana Abdel-Razzaq on Jan 11, 2017
Rent prices in UAE cities will remain unchanged throughout 2017, according to a new report by property consultant Cavendish Maxwell.
According to the report, which highlights the trends seen in Dubai and Abu Dhabi’s property market, apartment prices in Dubai declined up to 0.3% during Q4 2016 and declined an average 3% over the last 12 months.
Sofia Underabi, Head of Residential Valuation at Cavendish Maxwell, said: “Marginal declines are expected to continue in 2017 and a turnaround will be largely dependent on oil prices and US dollar movement."
Underabi added that this is a result of residential demand being primarily driven by job growth for expats as well as redundancies in the high income jobs keeping net job growth at low levels.
“In comparison, residential supply continues to expand, albeit at slower rates than pre-2009 and 2013-14 levels,” she said.
In Abu Dhabi, apartment prices in investment zones registered modest declines, with an average 0.2% fall in Q4 2016 and 2% on a year-on-year basis.
Manika Dhama, Research Manager at Cavendish Maxwell said average apartment prices in Abu Dhabi investment zones have declined nearly 7% since the highs in Q2 2014.
She said: “While the rate of decline in Q4 2016 has slowed in comparison to the first half of the year, the residential market in Abu Dhabi is expected to remain under pressure from redundancies in the oil and gas sector, job cuts at key employers such as Etihad as well as job losses likely to result from the mergers of NBAD-FGB and Mubadala-IPIC.”
Villa rents in Dubai have seen declines of 1.1% on average in Q4 2016, with investment yields for villa communities averaging 5.08% this quarter.
In Abu Dhabi investment zones, apartment and villa rents declined by 1.1% and 1.8% on average respectively.
“Rents at Al Raha Gardens declined more than properties at Al Reef and Saadiyat Beach, with a 2.2% drop in Q4 2016. However, 5 bedroom unit categories at Al Reef and Saadiyat Beach Villas have registered declines of more than 2% this quarter,” said Dhama.
A scheduled 61,000 units are expected to be completed in 2017, though delays are likely as in previous years, greatly reducing actual delivery.