Living costs affecting rents, says firm
The rising cost of living in Dubai is forcing people to move out of high-end areas of the city in search of cheaper homes, a real estate firm has said.
According to a report by Chestertons, the real estate market in Dubai witnessed a relatively flat start to the year.
“People in the city are looking to reduce living expenses by relocating to cheaper communities, which means that affordable communities are offering the highest yields for investors,” said Declan McNaughton, Managing Director, UAE, Chestertons MENA.
Apartment rents declined by 0.5 per cent in the first quarter, with Downtown Dubai recording the highest drop of about 5 per cent.
The villa rental market registered a decline of 2.5 per cent in top-end location Palm Jumeirah, with three-bedroom villas renting for an average of Dhs325,000 and four-bed residences for Dhs448,000, while Mudon villas in Dubailand continue to be one of the best value communities, with three-bed homes renting for Dhs188,000 a year and four-beds for Dhs203,000.
Locations such as Dubai Silicon Oasis, Dubailand and Dubai Sports City are also offering bargains, with one-bedroom apartments going for between Dhs55,000 and Dhs73,000 with two-bed unit from Dhs75,000 to Dhs95,000.
McNaughton said the current economic situation “could adversely affect the disposable income levels of residents” resulting in “further correction of rental rates in the high-end apartment and villa segment as the year progresses”.
Last month, figures from Dubai Statistics Centre showed inflation rose by 1.6 per cent in the first quarter of the year, but the average cost of providing an education for a child was up by almost 5 per cent compared to the year before.
Transport was among the costs that have decreased, dropping 6.6 per cent, in line with falling oil prices, leading to cheaper petrol.