KHALEEJ TIMES, Monday, Jan 10, 2022 | Jamada Al-Aakhirah 7, 1443
Rents will pick up further in 2022
Emirates:
Dubai rental market staged a strong recovery last year as the economy improved
with a successful vaccination programme and gradual opening of international
borders, experts say.
Referring to the latest report released by real estate consultancy ValuStrat,
analysts and industry specialists said market sentiments are expected to pick up
further this year. They said rents for residential and commercial properties
would continue to rise in 2022 but with a slower pace.
“2021 was a year of recovery from pandemic challenges and a beginning of the new
normal. Prices and rents mostly recovered to pre-pandemic levels record-breaking
sales volumes and values,” according to the ValuStrat report.
Haider Tuaima, head of Real Estate Research at ValuStrat, said the ValuStrat
Price Index (VPI) for Dubai’s rental values registered 67.3 points last year, up
6.7 per cent quarterly and 18.9 per cent annually. However, average rents are
still 4.9 per cent lower than when the Covid-19 pandemic began. He said the
weighted average annual rent for apartments as of the fourth quarter of 2021 was
Dh58,,707 and for villas was Dh236,650.
“No doubt villas performed better than apartments as far as rents are concerned.
Villas up 26.8 per cent year-on-year basis and 6.3 per cent quarter-on-quarter
basis while apartments’ rents grew 14.3 per cent year-on-year basis and 6.9 per
cent quarter-on-quarter basis,” Tuaima told Khaleej Times on Sunday.
In reply to how Dubai’s rental market performed in 2021 compared to 2020 and
2019, Tuaima said the VPI registered 70.8 points in the fourth quarter of 2019
compared to 56.6 points in the same quarter last year, reflecting a decrease of
20 per cent.
Ata Shobeiry, chief executive at Dubai-based real estate portal Zoom Property,
said rental market staged a strong recovery due to efficient policy measures
taken by the government.
“Expo 2020, the return of foreign investors and efficient handling of the
pandemic are some of the major reasons that led to the strong recovery in the
rental market,” Shobeiry told Khaleej Times on Sunday.
Outlook for 2022
The ValuStrat report said the outlook for 2022 is cautiously optimistic due to
local and global pandemic dynamics and over-supply fears. However, the report
alerted about downside risks and said the overnight might reintroduce movement
restrictions due to the spread of the Omicron variant of the Covid-19 virus.
Generally, prices and rents are expected to a slower pace, though some highly
desired prime locations are expected to see capital values reach their past 2014
peaks, the report said.
“Generally rents are expected to rise moderately during. However ever, prime
located properties where demand is high may continue to a see double-digit
increase,” Tuaima said.
Nikita Kuznetsov, CEO, Metropolitan Premium Properties, said the rents will be
increasing in Dubai this year but at a slower pace.
“We believe 2022 will see rental prices continue their northward trajectory, but
the rate of increase will be slower than in 2021,” Kuznetsov told Khaleej Times.
“We expect villas will continue to be in high demand and, as a result, rental
price increase for villas will be higher than apartments. On average, we can
expect to see a five per cent to seven per cent increase in rental prices for
apartments and seven to 10 per cent for villas,” he added.
He said popular locations for apartments would include Port De La Mer, Emaar
Beachfront as well as Dubai Creek. At the same time, while for villas, “we
anticipate strong interest” for the Tilal Al Ghaf project as well as Amalfi
estates upon completion.