Rents for apartments in Dubai have remained stable, registering no upward or downward movement across communities, reveals the second update of Real Estate Regulatory Agency’s (Rera) rent index.
A comparison done by Emirates 24|7 of the first index update of 2015 with the last update of 2014 had revealed a rental increase of 6 to 25 per cent across some of the master communities.
Read: First rental index update of 2015: Dubai rents up 6-25%
The index is updated every four months by Rera, the regulatory arm of Dubai Land Department.
As per the new update, leasing rates for one- and two-bedroom apartments remained the costliest on Palm Jumeirah. Leases ranged from Dh130,000 to Dh160,000 per annum (pa) and Dh180,000 to Dh230,000 pa, respectively.
The second costliest community for apartments was Downtown Dubai. Rents for studio units ranged from Dh70,000 to Dh80,000 pa, one beds from Dh100,000 to Dh120,000 pa and two beds from Dh170,000 to Dh190,000 pa.
Jumeirah Lakes Towers
In Jumeirah Lakes Towers, studio rents were between Dh55,000 and Dh75,000 pa, one beds from Dh80,000 to Dh100,000 pa and two beds from Dh120,000 to Dh150,000 pa.
Lease rates for studio, one- and two-bed units in Dubai Marina were priced at Dh60,000-Dh80,000 pa, Dh90,000-Dh120,000 pa and Dh140,000-Dh190,000 pa, respectively.
Among the lowest rentals were communities such as Dubai Investment Park (DIP), International City, Dubai Silicon Oasis (DSO) and Discovery Gardens.
Dubai Investment Park
Studio units in DIP were being leased for Dh25,000 to Dh35,000 pa. Rentals for one and two-bed units range from Dh40,000 to Dh50,000 pa and Dh60,000 to Dh80,000 pa, respectively.
Studio units in International City ranged from Dh30,000 to Dh40,000 pa, while one- and two-bed units were available from Dh40,000-Dh50,000 pa and Dh50,000-Dh65,000 pa, respectively.
Dubai Silicon Oasis
In DSO, rents for studio apartments ranged from Dh35,000 to Dh45,000 pa. One- and two-bed units were from Dh50,000 to Dh70,000 pa and Dh70,000 to Dh85,000 pa, respectively.
Lease rates for studio units in Discovery Gardens stood between Dh45,000 and Dh55,000 pa. Rentals for one beds were between Dh60,000 and Dh75,000 pa, while and two bed units ranged from Dh70,000 to Dh85,000 pa.
Reidin.com has reported that rents had increased marginally in January 2015, but the pace slowed down in February and March with lease rates facing further pressure as more units are released.
JLL, a real estate consultancy, predicted in January 2015 that Dubai residents could expect rental declines this year, with even rent-free periods being offered to tenants. Later, Knight Frank, a UK-based consultancy, also said residential rents were likely to fall by five per cent with sale prices likely to decline by 5 to 10 per cent.
The Dubai government has issued Decree No. 43 of 2013 concerning the percentages of maximum property rent increase that are to be allowed upon renewal of tenancy contracts. The rent increase slabs are as follows:
# No rent increase if the rent of the property unit is less than 10 per cent of the average rent of a similar property in the same residential area.
# If the rent value is between 11 and 20 per cent less than the average rent of a similar property, the maximum rent increase shall be equal to 5 per cent of the rent value.
# If the rental value of a unit is between 21 and 30 per cent less than the average rent of a similar unit, the maximum rent increase shall be equal to 10 per cent of the rental value.
# If the rental value of a property is between 31 and 40 per cent less than the average rental of a similar property, the maximum rent increase shall be equal to 15 per cent of the rental value.
# If the rental value of a property unit is less than 40 per cent or more of the average rent of a similar unit, the maximum rent increase applicable is of 20 per cent.
The average similar rental value of the property will be determined by the Real Estate Regulatory Agency's rent index, the decree states.
It is also expected that Rera will unveil a more detailed rent index this year which will take into consideration various factors such as views from the apartment and facilities in a tower, age of the building, etc. when revealing the average rent for the apartment.
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