Palm Jumeirah registers highest annual apartment and villa rents, CBRE reports
DUBAI: The residential rental market in Dubai has witnessed a significant surge in recent times, with CBRE, a leading real estate consultancy, reporting a 21.1% increase in average rents in May.
The upward trend, although expected to continue, is anticipated to slow down as affordability constraints begin to take hold.
The report highlights that several key and prime residential neighborhoods are heading towards single-digit growth, indicating a potential cooling of the market. The average apartment and villa rents now stand at AED 126,598 and AED 352,572 per annum, respectively, with the highest rents found in the prestigious Palm Jumeirah area.
The rise in rents has had a spillover effect, leading to considerable annual increases in secondary communities as well. This trend has been driven by a 12.2 per cent growth in renewed rental registrations, while new contracts have declined by 3.7 per cent.
CBRE attributes this to tenants opting to renew their leases in the same location, as the rapid rate of rental growth has significantly impacted affordability.
Despite the continued rise in rents, the report suggests that the pace of growth is expected to slow down, as affordability constraints begin to catch up with the market. The shift in the market dynamics will likely have implications for both tenants and landlords, who will need to adapt to the changing landscape.
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