Dubai and Abu Dhabi rental market – What to expect in 2019?

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.

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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.

Dubai is still playing the role of a sound trading hub

Long ago Dubai left its dependence on oil and gas reserves and turned into a trade and tourism hub. Boom in trading and tourism activities also increased the demand for its Dubai real estate sector. However, the economic crunch changed the situation and investors flew back to their home countries, abandoning their property in Dubai. Most of the businesses were closed or shifted to the neighbouring states. However passing through all the upheavals of past years, Dubai has made a comeback and reinforced its role as a stable and sound trading hub in the region. Entrepreneurs are expanding their businesses by apprehending the market situation.

This truth is supported by the stock market statistics of last month that reveal the stock market performed better than anywhere else in the world as businesses improved earnings so they paid higher dividends. The government officials claim that the city has no need to raise money from international bond markets this year.

Dubai, United Arab Emirates

Dubai, United Arab Emirates

The Viewpoint
It is expected that Dubai’s economy will expand and a few analysts have estimated that it will expand as much as five percent this year after growing more than three percent in 2018. This is one of the reasons that businesses are shifting back to Dubai and people are buying more and more commercial properties in Dubai.

The safety Factor
According to one of the analysts, Dubai is growing once again in transportation, logistics, tourism and the economy is being better managed currently from a couple of years prior to 2015. Businesses are coming back to Dubai due to political stability of the region. Therefore, economic growth and political stability both are favouring recovery in Dubai.

Decline in Costs
The decline in the cost of conducting business is also making Dubai more competitive. Dubai rent amounts have decreased around 65 percent on average as compared to the peak prices prior to 2015. Therefore, more and more businesses are shifting back to Dubai and the existing companies are expanding their businesses to take benefit from these opportunities.

The story of grand Burj Khalifa – From completion to the date!

The super tall skyscraper, Burj Khalifa, is not only the tallest structure in the world but is also one of the luxurious and lush developments which add to the lure of Dubai. Being the centre of the mixed-use flagship development Downtown Dubai, Burj Khalifa includes 30,000 homes, 19 residential towers, nine hotels, observation deck, Parkland and man made Burj Khalifa Lake. The height of this tallest skyscraper is approximately 829m and it is expected to remain the tallest structure in the world until 2017.

Completion during bad times!

When the global final crises hit Dubai property market, Burj Khalifa was under construction. When it was completed on 4th January, 2010, the real estate sector of Dubai was in distressed condition. Overall the rate of vacancies and foreclosures were quite high and the confidence of the investors on Dubai real estate was badly shattered. When Burj Khalifa was opened, it was thought that it would not only raise the prices of properties in Dubai Downtown but also set the track of Dubai real estate on the whole towards recovery.
After the two months of its completion, a report was issued according to which occupancy levels in Downtown Dubai were reported to be 70%. These occupancy levels were mostly of the other developments and in Burj Khalifa, vacancy rate remained high. The wave of hopelessness spread when even after ten months of the completion, the vacancy rate of the apartments in Burj Khalifa remained quite high. The rents of the apartments fell by 40% due to lack of demand. Even out of total 900 apartments, some 825 were lying vacant at that time.

Cheerful News about Burj Khalifa!

With the better price stabilization noticed in 2011, experts predicted quick start to recovery in 2012. Finally 2012 is there and as predicated, it has brought first cheerful news about the Burj Khalifa residences. The results of Q1 have clearly indicated a growth of 9% to 10% in the prices of apartments in Burj Khalifa as compared to the previous quarter. During the final quarter of 2011, prices ranged Dh2600 to Dh3200 but now the same apartments are selling at Dh2850 to Dh3600.

The apartments providing awe-inspiring views of the lake, fountain, park or the road are selling at higher prices as compared to those that don’t offer such views. Consequently the prices of apartments having great views are improving while for the rest of the units they are showing stagnancy. On the other hand, rents are also showing minimal increases.

With the better demand forecasts in Downtown Dubai in the coming months, higher occupancy levels in Burj Khalifa are also expected, since luxurious properties are now at the top of the priority list of the investors and no other development can ever beat the luxurious lifestyle of the spectacular Burj Khalifa residences.

The skyscraper Burj Khalifa

The skyscraper Burj Khalifa