Are you a resident in Dubai criticaly awaiting relief from increasing rental prices?Indeed, hope has a ray of sunshine that will shine at the end of the tunnel.

The UAE real estate market seemingly will lose some impetus as far as rental increase across dubai is concerned as the year 2024 is just a couple of months away.

Are you tired of scraping by, just managing to make your rent this month? Latest numbers by ValuStrat, the top-notch real estate valuation and advisory provider, signify relief for tenants as generating rentals are subsiding in properties across Dubai, this year.

Let us start this topic with the definition of the help and how it affects the renters in this vibrant emirate.

Uae Real Estate: In 2024, The Growth In Rental Rates For Dubai Properties Is Expected To Pause

As supported by the ValuStrat, which is a leading real estate valuation and advisory services company, tenants in Dubai in case they expect a rental decline rate will be reassured by a slush in 2024.

Even though the demand for real estate in Dubai is still very high in 2023, the survey forecasts that the apartment owners will see the growth of the rentals moderate in the following year.

VPI, which is a ValuStrat Price Index for Dubai’s housing market, shows that in contrast to the previous period, there was a 11.7% YoY growth registered in the second quarter this year and it brought the total to 91 points.

Similarly, the most impressive hikes happen in the mentioned communities where the most residual improvement occurred: Jumeirah Islands (20.8%), Emirates Hills (19.6%), Palm Jumeirah (17.9%), Dubai Hills Estate (17.3%) and Arabian Ranches (16.8%).

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Gains On Rentals

This note was a step-up in both directions: for yearly rental trends, we are talking about a leap of 32.6% and a quarter-to-quarter growth of 3.5% for new contracts.

VPI results manifest some villas which played the main role in leading to a high rents trend, revealing an annual hike of 52% and a quarterly rise of 3.7%. To this outcome it seems that the average yearly rent for villas is 394,500 AED or $107,420.

In the second quarter of 2023, the capitalization of Prime villa and apartments rose and achieved its new historical peak, this was reported by Towser.

An average valuation of villa units has just above the earlier peak point which was registered in the year 2014 by 1.2%, breaking the record at 114.9 VPI points.

There were prices of the Villa which indicate an annual increase rate of 15.8 % after a quarter rise of 4.3 %.

Focusing on the present market flows, Taha Ta’imein the Leader and the Head of Real Estate Research at ValuStrat said that there is over 85% of the apartments on the Dubai market, an overcapacity in the supply.

Over-supply has implications in housing as building is still ongoing in many areas and the trend in GTA townhomes and apartment prices have remained low.

Tuaima continued by saying, “For example, most flats have not experienced huge capital values since the last two years until now.

This is so with the expansion in villas and mansions whose prices have gone higher due to unmatching demands and lowered supply.

As investors realize that the values of villas and mansions have risen too high for them, they now turn to smaller, more affordable homes whose prices have not.

Reasonably Priced Category

Notably, the lower income (volume) segment of the (housing) market has recently seen improvement for the first time in the pandemic, this was observed in the latest research.

A direct correlation was observed between cheaper and better yielding areas of the city and their quarterly performance through Privilege Gargen (up to 4.5%), Motor City (4.3%), The Greens (3.9%), and Dubai Production City (3.4%).

As far as Haider Tuaima is concerned, the segmentation of the lower priced areas recorded evident capital gains for the first time after the pandemic.

This region of the market experienced quarterly growth of four and a half percent in Discovery Gardens, four percent in Motor City, three percent and a half percent in The Greens, and three and four percent respectively in Dubai Production City.

The projected multitude of halting factors in other sectors is pinpointed by the sustained extension of the 2.5-year surge along with the affordable residential sector.

This progression is expected to be financed through the affordable range of homes. Investors are being more conscientious in regards to their purchase because it reflects an investment growth as well.

Additionally, there is a growing tendency for those who have been tenants will now be beginners in home ownership because they find themselves in high rent prices.

It is this that contributes to the raised demand. The growth trend in retail sales of the middle-class boroughs is causing prices’ upward trend in cheap areas nowadays.

At any rate, growing numbers of tenants who think of compromising with buying a home in affordable communities as the rents keep rising will bring scrutiny on rental agreements in 2024.

Besides that, in his, Haider Tuaima stated, “I am hoping to see the rentals increasing in the new leases and in the upcoming year but not so aggressively.”

Conclusion 

The year 2024 onwards is expected to display lower rental increment rates in Dubai realty properties, which in turn is a welcome relief for families who struggle to meet survival costs.

Realizing this on-going movement may suggest a sign of a certain reprieve from the ceaseless edging of rental prices.

The market now looks poised for a more steadied and stable state over the next year; this, in turn, will bring about some positive outcomes to apartment dwellers.

This forecasted balance establishes a chance for tenants to breathe fresh air and it gives them a clear view with more assurance in the real estate market of Dubai in the future.