Rents continue to drop in the UAE

These days one of the hot topics we are discussing about  in the UAE is the rents continue to drop in the UAE. As an expat living in the United Arab Emirates (UAE) when somebody asks my advice about Emirates, the first topic is definitely “Rents”.  Yearly rent for a studio was  around 15.000 USD in 2015. So it is a topic to talk…

As an expat living in the United Arab Emirates (UAE) when somebody asks my advice about Emirates, the first topic is definitely “Rents”.  Yearly rent for a studio was  around 15.000 USD in 2015. So it is a topic to talk…

Two years before when the rent increase law(rent cap) which was limiting the rent increases have been taken on hold and the rents hiked all of a sudden more than 15% in some properties in Abu Dhabi and other emirates as well. Everybody was thinking that the rents will continue to hike.

But the sudden decrease in the oil prices showed its effect and rents started to drop (some says maturing :))  at the end of 2015.

But I was not expecting the rent drops would continue in 2016 but to settle down.

First, The news article referring a report “Rents continue to drop as property market matures” at Big 5 website confirms me;

The report, issued by Core UAE, the real estate consultancy affiliated with Savills, compares rental declines in apartments which have been in the range of 5-6 percent in areas such as DIFC Downtown, Dubai Marina and JBR (Jumeirah Beach Residence). Meanwhile, villas have seen declines of 3-12 percent since the beginning of 2015.

Secondly, yesterday a friend of mine, living in the newer part of the city called Reem Island happily told me that; the owner has decreased the rent around 1%. Which makes me write about the topic.

On the other hand, developers continue their projects but you can see a slow down in the new developments which is not good news for me as a construction professional.