Re­port links re­dun­dan­cies to price drops

7 Days in Dubai - - NEWS - @Ma­hakLFC ma­

Re­dun­dan­cies among pro­fes­sion­als is among the rea­sons Dubai’s rental sec­tor saw the largest quar­terly de­cline for five years, ac­cord­ing to a new re­port.

Real es­tate con­sul­tancy Clut­tons recorded a 2.7 per cent drop in the first three months of this year, com­pared with the same pe­riod in 2015.

Apart­ments reg­is­tered a fall of 4.1 per cent while villa rents fell by 1.8 per cent.

The drop is only seen when ten­ants - who are locked into their con­tracts - come to re­new.

Faisal Dur­rani, Head of Re­search, said: “It is our view that an over­all de­cline of around five per cent on av­er­age is likely within 2016.

“Weaker eco­nomic con­di­tions have ham­pered the rate of over­all job cre­ation which is trim­ming the nor­mally ro­bust stream of ten­ants, caus­ing a drop in rents.

Ac­cord­ing to the re­port, “Weak­ness in the global econ­omy is trans­lat­ing into a ris­ing num­ber of re­dun­dan­cies in the fi­nance and By Ma­hak Man­nan bank­ing sec­tor - which is a crit­i­cal source of credit for ten­ants.”

Last week, Mor­gan McKin­ley re­ported job va­can­cies in the UAE dropped 12 per cent in the first quar­ter of 2016, com­pared with 2015, con­clud­ing: “It’s a tough mar­ket out there.”

Dur­rani added: “The top end of the prop­erty spec­trum in­clud­ing the Burj district, Dubai Ma­rina, Palm Jumeirah and DIFC will see more sig­nif­i­cant cor­rec­tions of five to seven per cent.”

Fur­ther­more, the ben­e­fit on job cre­ation from Expo 2020 is not ex­pected un­til about 2018, the re­port claimed, though it will have a pos­i­tive im­pact when it ar­rives. Dur­ing 2016, Clut­tons ex­pects 7,058 new prop­er­ties to be com­pleted, fol­lowed by a fur­ther 10,299 in 2017.

BIG CITY LIV­ING: Dubai Ma­rina has both mid-priced and high-end rent op­tions, the re­port stated

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