Liv­ing costs af­fect­ing rents, says firm

7 Days in Dubai - - BUSINESS - Ma­hak@7days.ae

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.

Newspapers in English

Newspapers from UAE

© PressReader. All rights reserved.