The rental market dynamics is one that continuously intrigues tenants and landlords, and the data for August 2024 showcases noteworthy trends and performance indicators in this vibrant space.
Let's take a closer look at the key highlights that shaped the rental landscape during last month after recently we presented the data for sales transactions.
Overview of property rents
The property rental market experienced a mix of stability and growth in August 2024. Analyzing the statistics for last month reveals a compelling narrative for landlords, investors and current tenants seeking insights into the price evolution.
1. Average Rents overall
Last month, the annual rent value on new contracts for apartments, villas and commercial properties in the city was 76,000 AED, representing a 13% increase from January this year and 3% increase vs prior month. The rents values show a steady trajectory, signaling a balanced market for both landlords and tenants.
2. Breakdown of rents values by property types for new contracts
Apartments 17.6% increase vs August 2023
Villas and Townhouses 8.5% increase vs August 2023
Commercial properties -22% decrease vs August 2023
The prices increase for apartments and villas continues to reflect the robust demand during summer months.
Rental performance for apartments
Last month, the annual rent on new contracts for apartments in the city, increased to 69,500 AED, representing a 16% increase from January.
The overall rental price changes on new contracts, for apartments in the main areas are as follows:
Dubai Marina 9.1% YoY increase, sitting at a median rent of 120,000 AED, lower by -4% compared to July
Downtown Dubai 9.3% YoY increase sitting at a median rent of 147,500 AED, down by -1.7% compared to July
Business Bay 15.9% YoY increase sitting at a median rent of 95,000 AED down by -4.5% compared to July
Palm Jumeirah -1.3% decrease compared to same month LY sitting at a median rent of 187,500 AED down by -3.8% compared to July
3. Demand and Supply Dynamics
The interplay between supply and demand is a crucial factor influencing the property rental market on the long term.
The expected property supply this year is 24,000 units to come into the market, while currently have been completed 17,877 units in the city.
4. Emerging Trends in Rental Preferences
Analyzing the data from August 2024, a shift in rental preferences became evident, with certain areas witnessing increased demand due to factors like proximity to amenities, transportation links, and lifestyle offerings. These emerging trends highlight the importance of understanding market dynamics to capitalize on investment opportunities that can provide a better yield.
5. Luxury vs. Affordable Rentals
Dubai's properties caters to a diverse clientele, ranging from individuals seeking luxury accommodations to those looking for affordable yet quality living spaces.
The above-mentioned areas are the most commonly preferred for luxury apartments among with places like Jumeirah Bay Island or Blue Waters Island.
Tenants looking for affordable apartments are looking at locations in Deira, Bur Dubai, Al Qusais or International City.
Conclusion
It becomes evident that the sector continues to offer attractive opportunities for investors seeking to capitalize on the city's growing economic and population potential. By staying informed about market trends, rental preferences, and key economic indicators, investors can make well-informed decisions that align with their investment objectives.
Stay tuned for our next update as we continue to unravel the unfolding narrative of Dubai's real estate landscape!
Source: DXB Interact
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