10 May 2023, Zawya
The average cost to rent an apartment in Business Bay and Downtown Dubai underwent price hikes of nearly 68 percent during Q1 2023, according to a new report by property portal Bayut.
The Dubai Property Market Report for Q1 2023 revealed the most searched areas in the emirate’s real estate sector, indicating that prices in the industry have increased across popular neighbourhoods, favouring sellers and landlords.
Downtown Dubai, known for its luxury apartment rentals, observed a spike in rentals following the handover of the Burj Royale units.
Other areas popular among potential tenants in search of luxury apartment rentals included the Palm Jumeirah and Mohammed Bin Rashid City, which witnessed noticeable increases in rental costs, particularly for three-bedroom units, which were further buoyed by a limited inventory.
Further down Sheikh Zayed Road, Dubai Marina also witnessed an appreciation in rental costs by nearly 39 percent. According to Bayut, in Q1 2023, the asking rent for apartments in Dubai Marina averaged at AED 91,000 for a one-bedroom unit, AED 139,000 for a two-bedroom and AED 207,000 for three-bedroom units.
Surge in villa rentals
The real estate market report also reported a spike in luxury villa rentals across popular neighbourhoods in Dubai, which witnessed significant appreciations in annual costs during Q1 2023.
Umm Suqeim emerged as the top choice for luxury villa rentals in the emirate, with properties there experiencing upticks of 25 percent to 50 percent across all bed types. In Q1 2023, the average rent stood at AED 271,000 for a four-bedroom, AED 315,000 for a five-bedroom and AED 474,000 for six-bedroom units.
Neighbouring Jumeirah remained a favoured option for high-income tenants. The asking rents for villas appreciated up to 54 percent. During Q1 2023, the rental costs for four-bedroom houses in Jumeirah averaged AED 273,000. The five-bedroom houses were rented out for AED 331,000, whereas the six-bedroom houses were priced at AED 460,000.
Dubai Hills Estate, Palm Jumeirah and Arabian Ranches 2 also reported price increases from 5 percent to 89 percent, with landlords pricing their properties higher to benefit from increasing demand. The highest appreciation in rental costs was recorded for properties in Dubai Hills Estate.
The property report didn’t spell all doom and gloom for renters on a budget. The findings also identified neighbourhoods across Dubai that still offer affordable housing, with Jumeirah Village Circle emerging as a hot favourite in Q1 2023.
The asking rent on apartments in Jumeirah Village Circle witnessed an increase by 15% to 24% during Q1 2023. On average, studio flats were priced at AED 36,000, whereas one-bedroom and two-bedroom flats were rented out for AED 51,000 and AED 73,000, respectively.
Budget conscious tenants showed an inclination towards flats in Bur Dubai, Deira, Al Nahda and Dubai Silicon Oasis.
Asking rents for apartments appreciated between 6 percent to 19 percent, with the most prominent increase in rental costs observed in Dubai Silicon Oasis, following an increase in demand for properties in the area, according to Bayut.
Those hunting for affordable villas should take note that Mirdif emerged as the top choice for potential tenants during Q1 2023.
The asking rents for villas in Mirdif increased up to 15 percent, averaging at AED 98,000 for three-bed, AED 118,000 for four-bed and AED 134,000 for five-bed houses, over the survey period.
DAMAC Hills 2 also emerged as a popular option for tenants in search of reasonably-priced houses in Dubai. During Q1 2023, the district recorded price hikes of up to 9 percent for three-bedroom and five-bedroom villas, which averaged at AED 63,000 and AED 73,000 respectively. Valued at AED 98,000, the four-bedroom houses in DAMAC Hills 2 became more affordable by 6.18 percent.
Jumeirah Village Circle remained a hot favourite in terms of villa rentals as well, along with communities such as Reem and Dubailand.
The average rents for houses in these neighbourhoods recorded general upticks of 2 percent to 59 percent. The five-bedroom houses in Dubailand recorded the most significant increase in the average rental costs in response to the increasing demand.