Since the outbreak of the COVID-19 pandemic in 2020, Dubai's real estate market has experienced significant fluctuations followed by notable recovery. The early pandemic phase saw major declines in property prices and rents due to company layoffs and economic recessions, prompting many to leave the country. However, effective government measures and gradual economic recovery have facilitated Dubai's real estate market resurgence starting from late 2020 and early 2021, with substantial foreign capital inflows driving up property prices and rents.
According to data from real estate consultancy Asteco, the following areas witnessed the highest increases in apartment rents from Q1 2021 to Q1 2024:
1. Palm Jumeirah
2. Dubai Marina
3. Downtown Dubai
4. Jumeirah Village
5. Jumeirah Beach
For villas, the areas with the highest rent increases include:
1. Jumeirah Islands
2. Palm Jumeirah
3. Dubai Sports City
4. Dubai Hills
5. Damac Hills
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John Allen, CEO of Asteco Valuations & Consultancy, noted that these areas command higher rents due to their uniqueness, convenient amenities, proximity to major commercial districts and leisure attractions. Self-sustaining communities featuring high-quality properties developed and managed by reputable companies consistently attract strong demand and command higher rents. Certain communities offering ideal functionalities such as family-friendly environments, proximity to schools and green spaces, and limited new supply have intensified competition for available units, thereby driving up rents.
In the apartment category, the areas with the smallest rent increases include:
1. Meydan/MBR City
2. Mirdif
3. Bur Dubai
4. Deira
For villas, the areas with the slowest rent growth are:
1. Damac Hills 2
2. Dubailand
3. Dubai Silicon Oasis
4. Mirdif
5. Reem
Allen pointed out that some areas face oversupply issues, particularly those focused on affordable housing near Al Qudra roundabout, along the E611 corridor, and near Al Maktoum International Airport, as well as older properties with outdated facilities. These areas often experience slower rent growth due to lack of competitiveness. Additionally, mature areas like Deira, Bur Dubai, and Mirdif witness less aggressive rent increases from landlords, resulting in more moderate growth rates.
Looking ahead, Asteco forecasts that while popular locations will continue to maintain strong demand levels and moderate rent growth, rents in third-industry locations such as Dubai-Al Ain Road, Lehbab Road, Al Qudra roundabout, E611 corridor, and near Al Maktoum International Airport will see significant increases. This surge primarily stems from tenants gradually being priced out of central and mature communities due to rising rents, thereby shifting towards these relatively lower-cost rental areas.
Dubai's economy has demonstrated sustained resilience, with the UAE government steadfastly focused on enhancing quality of life, attracting skilled professionals, and nurturing a robust economic environment. This ongoing strategy continues to draw a significant influx of expatriates, ensuring sustained demand and flexible rental dynamics in the residential market.
