Dubai rental market trends
The higher stability observed in Dubai real estate during 2018 has led experts to predict a kick-start recovery in initial few months of 2019. Dubai rental market is expected to spring back to life because rentals of the residential units have already fallen to the maximum extent in most of the areas across Dubai. New supply of property units is expected to become part of the market during first six months of the year and this oversupply will match the rising demand and set Dubai rental market on steady recovery track.
The demand of the Dubai rental properties is expected to originate from the GCC nationals who consider Dubai the best city for enjoying quality lifestyle. Since the landowners in Dubai know that the troubled real estate has turned general investors into astute ones, therefore to increase the property demand and lure the investors to the vacant properties, they provide better amenities and facilities.
Currently the rents are showing high stability in the areas like Downtown Dubai, Al Barsha, The Greens, and Dubai Marina. Although some areas, like Discovery Gardens, Silicon Oasis and Jumeirah Lake Towers, still show rental declines of 5-15%, yet the rate of this decline is expected to slow down with the increase in demand. The recovery is expected to gain momentum gradually and as a result, the rental market may bounce back in 2018.
Abu Dhabi rental market trends
The expected trends for the Abu Dhabi real estate in 2019 are entirely different from that of Dubai real estate. Rents in Abu Dhabi are accepted to continue falling during 2019. In 2018, the supply of units in the capital remained steady, which badly affected the rental rates and thus the problem of oversupply will continue troubling the market in the following year as well.
Especially in 2018, a significant decline in rental rates was noticed in some areas outside the city due to large supply of new units. New supply of 5000 residential and commercial units will strike the market in the first quarter of the New Year. Since the sales prices and rentals have not touched the bottom level, the trend of rental declines will continue.
In order to attract tenants towards the properties, landlords are providing various incentives like grace period of one or two months in which no rent would be charged and free renovation services. Some property owners are even renting out their properties with free utility services and without setting a requirement of annual rental increases.