Dubai’s villa rents keep soaring – will they set new records in 2022?
21 December 2021 – Gulf News – www.gulfnews.com
Dubai: Planning to shift to a new villa in Dubai? Then, be prepared to pay anywhere between 20-40 per cent higher as demand for villas and townhouses keep escalating.
It has reached a point where just about every villa likely to be delivered within the next three months have been booked out in advance. There are few, if any, such listing available, and even with more villas to be delivered next year, demand will clearly outrun all supply.
“There is almost no ready stock available for villa rentals,” said Firas Al Msaddi, CEO of fam properties. “Someone currently occupying a villa – say, rented out in 2018-19 – and wanting to shift to a bigger property is looking at a minimum 20 per cent increase on his rental bill.
“There are no more bargains available on villa rentals in Dubai.”
The way they are going, villa rents in Dubai could be setting new all-time highs by the second-half of 2022.
A four-bedroom villa (spreading over 2,175 square feet) to be delivered next month at Dubai Hills carries a Dh220,000 rental tag, as per property portals. At the Palm, the four- and five-bedroom homes in the rental market are coming with six-figure sums attached. (These days, many of the listings come with the helpful message of ‘Ask for price’, suggesting that the landlords and estate agents are only interested in taking on ‘genuine’ interest.)
Dubai Hills and the villa/townhouses emerging at MBR City are clear favourites in the current upturn, and so are the Nakheel-backed ones at Nad Al Sheba. (The latter’s recently launched Jebel Ali Village units proved an instant hit.)
All through the new wave of villa deliveries, the Palm retains its popularity, whether it is for a Dh100 million plus home or one that comes in slightly lower than that.
More coming through
Based on fam estimates, there are around 116,000 apartments being built in the city. Taking only those that have gone past the 75 per cent completion mark, around 40,000-48,000 new units will likely be handed over in 2022.
When it comes to villas and townhouses, there are about 26,500 homes getting built, of which about 5,000-6,000 will likely be ready next year. Quite a few of them would have actual end-users moving in, which means that what comes to the rental market may not be enough to meet anywhere close to the actual demand.
“Plus, there are so many villas being diverted to the holiday home market, which adds to the scarcity,” said Al Msaddi. “There are some exceptionally high daily rates being generated for luxury holiday homes in Dubai – so much so, any investor with a villa would want to cash in.”
Market sources say that the conversion to holiday homes/short-term lets is what is actually adding to the villa scarcity in Dubai’s rental market. “Any owner with a luxury holiday home in Dubai is sitting on a goldmine,” said the head of a leading property management firm. “Homes were being leased weeks and months in advance for the end-of-year breaks.
“The holiday home landlord can ask any price – and the chances are that he will get it.”