New builds set to weaken Dubai property prices
Asteco report says 13,000 new homes expected to be delivered this year, putting further downward pressure on rents and sale prices
Around 13,000 new homes are set to be delivered into the Dubai retail market in 2015, which is likely to further weaken rental levels and sales price growth, according to new research.
A report by property consultancy Asteco states that over the course of 2014, rents grew by 7% for apartments and 4% for villas. Sale prices were up 4% and 1% respectively.
However, growth was heavily weighted towards the first half of the year, with both rents and sale prices declining in the last six months.
Currently, the citywide average rent for a two-bed apartment stands at $33,218 (AED122,000) per year.
“A further 12,000 apartments will be added to the city’s existing inventory in 2015, as well as over 2,000 villas, said Asteco's managing director John Stevens.
"This is good news for tenants across the emirate, and a more tempered rental environment is especially welcome when you consider that since 2011 apartment rents have increased by 65%, and villas by 55%.”
Stevens said that villa rental rates are likely to remain stable in desirable areas, but will fall in less desirable locations.
“Looking beyond this year, a more significant drop in rental rates could be on the cards from 2016 onwards as the large number of projects announced in 2013/14 (an estimated 12,000 to 14,000 villa units) are completed,” he added.