It isn’t really breaking news (anymore) that rents and home prices in Dubai have been rising more rapidly than anywhere else in the world.
A new report on the first half performance of Dubai’s real estate market by property consultancy Asteco now lists the most expensive and cheapest areas for accommodation in Dubai.
Not surprisingly, Dubai’s artificial archipelago Palm Jumeirah is the most expensive to rent as well as buy, with annual rents of a 5-bedroom luxury villa going as much as Dh1 million and sales price touching Dh4,000 per square feet for the most premium properties.
On the other hand, apartments in Dubai’s International City remain the cheapest accommodation available in the emirate, with annual rentals starting at Dh35,000 for a studio apartment.
The next cheapest annual accommodation in Dubai can be found in Deira, where studio apartments can be rented starting Dh38,000, followed by Jumeirah Village (starting Dh50,000 per annum for a studio apartment).
In Discovery Gardens a studio flat will set a tenant back by Dh52,000 pa, while in Jumeirah Lakes Towers (JLT) a studio apartment can be rented for Dh65,000 per year.
On the upper end of the spectrum, after the luxury sea-facing villas of the Palm Jumeirah are the 5-bed mansions in Jumeirah, which will set you back by Dh500,000 per year.
A similar property in Arabian Ranches can be rented for Dh450,000 per annum while a 5-bed villa in Jumeirah Islands will cost up to Dh420,000, according to Asteco data. If you don’t mind a little older community, then a 5-bedroom villa in The Meadows can be rented for up Dh350,000 per year.
Source: Asteco; data for Q2, 2014
When scouting for an average 2-bedroom apartment on rent, International City is the most economical (Dh65,000 per annum), followed by Deira (Dh80,000) and Discovery Gardens (Dh85,000). These are followed by the up and coming Jumeirah Village area, where a 2-bed apartment can be rented for Dh90,000. Tied at the fifth spot for the cheapest 2-bedroom apartments are Jumeirah Beach Residence (JBR) and Jumeirah Lakes Towers (JLT), where the units can be rented for Dh120,000 per annum.
Now let’s look at Dubai’s most expensive areas to rent a 2-bedroom unit. Palm Jumeirah is the most expensive, with 2-bed units going for as much as Dh220,000 per year. That the view from the property is a big factor that decides the rent of your unit can be gauged from the fact that JBR can also be the second most expensive area to rent a 2-bedroom apartment, with rents going up to Dh200,000 per annum.
Tied at No. 2 with rents going up to Dh200,000 for a 2-bed unit is Dubai Marina, located adjacent to the JBR development.
At No. 4 in Dubai’s most expensive areas to rent a 2-bedroom apartment is Downtown Dubai, where the annual rent of a 2-bedroom unit could go as high as Dh190,000. Finally, at No. 5 in Dubai’s 2-bed rental hotpsots is Sheikh Zayed Road, where priced could go up to Dh170,000 per annum.
Source: Asteco; data for Q2, 2014
Recent reports have indeed highlighted that with the increase in the emirate’s house rents outpacing all global destinations in the first quarter of 2014, many more people are considering purchasing a house in Dubai for living in it. Read: Dubai rents rise fastest in the world
Prime residential rental growth in Dubai continues to outpace that of the traditional financial centres of London and Hong Kong, Knight Frank said in a report last week. The consultancy noted that Dubai’s increasing prime residential rentals, which are outpacing wage inflation, are a major factor leading residents to consider buying a home in Dubai.
“In Dubai, prime rents continue to outpace wage inflation. This is raising concerns about affordability and is leading domestic and expat buyers alike to consider purchasing a home,” the report said.