The average cost of renting a home in Business Bay and Downtown Dubai experienced a price increase of almost 68 per cent in the first quarter of 2023, according to a new report from real estate portal Bayut.
The Dubai Real Estate Market report for the first quarter of 2023 reveals the most searched areas in the emirate's real estate sector, indicating that prices in the sector have increased across popular neighbourhoods, favouring both sellers and landlords.
Downtown Dubai, known for its luxury flats for rent, observed a spike in rents following the handover of Burj Royale units.
Other areas popular with potential tenants looking for luxury flat rentals included The Palm Jumeirah and Mohammed Bin Rashid City, where rents rose significantly, particularly for three-bedroom units, which rose further due to limited stock.
Further up Sheikh Zayed Road, Dubai Marina also witnessed a rise in rental costs, with an increase of nearly 39%. According to Bayut, in the first quarter of 2023, the average rent for flats in Dubai Marina was Dhs91,000 for a one-bedroom, Dhs139,000 for a two-bedroom and Dhs207,000 for a three-bedroom.
Surge in villa rentals
The real estate market report also said that luxury villa rentals in popular neighbourhoods across Dubai have surged, with annual costs in these neighbourhoods rising sharply in the first quarter of 2023.
Umm Al Suqeim emerged as the top choice for luxury villa rentals in the emirate, with properties there seeing rises of between 25 and 50 per cent across all bed types. In the first quarter of 2023, the average rent for a four-bedroom was AED 271,000, a five-bedroom AED 315,000 and a six-bedroom AED 474,000.
The neighbouring Jumeirah area remains a popular choice for higher income tenants. Asking rents for villas have appreciated by 54%. In the first quarter of 2023, the cost of renting a four-bedroom home in Jumeirah averaged A$273,000. Five-bedroom houses cost AED 331,000 to rent, while six-bedroom houses cost AED 460,000.
Dubai Hills, Palm Jumeirah and Arabian Ranches 2 also reported price increases of between 5% and 89%, with landlords pricing their properties higher to benefit from growing demand. Properties in the Dubai Hills saw the highest appreciation in rental costs.
Affordable communities
For renters on a budget, this property report isn't all doom and gloom. The findings also point to communities across Dubai that still offer affordable housing, with Jumeirah Village Circle emerging as a favourite in the first quarter of 2023.
Flat rents in Jumeirah Village Circle rose by between 15 and 24 per cent in the first quarter of 2023. On average, studio flats were priced at Dhs36,000, while one- and two-bedroom flats were priced at Dhs51,000 and Dhs73,000 respectively.
Budget-sensitive tenants tend to opt for flats in Dubai Creek, Deira, Al Nahda and Dubai Silicon Oasis.
According to Bayut, asking rents for flats rose by between six and 19 per cent, with Dubai Silicon Oasis seeing the most significant increase in rents as demand for properties in the area increased.
Those looking for cheap villas should note that in the first quarter of 2023, Mirdif emerged as the top choice for potential tenants.
Asking rents for villas in Mirdif increased by 15 per cent during the survey period, with the average rent for a three-bedroom property standing at Dhs98,000, a four-bedroom property at Dhs118,000 and a five-bedroom property at Dhs134,000.
DAMAC Hills 2 has also become a popular choice for tenants looking for reasonably priced homes in Dubai. In the first quarter of 2023, prices for three- and five-bedroom villas in the district rose by as much as 9 per cent to an average of Dhs63,000 and Dhs73,000 respectively. The price of a four-bedroom house in DAMAC Hills 2, worth Dhs98,000, rose by 6.18 per cent.
Jumeirah Village Circle remained popular for villa rentals, as did communities such as Reem and Dubailand.
Average rents for homes in these communities recorded a general increase of 2% to 59%. The most significant increase in average rental costs was recorded for five-bedroom homes in Dubailand in response to growing demand.
