Most Affordable Areas in Dubai as Rents Set to Increase Further in 2023

Recovery started after the virus as several overseas employees returned with the recovery in the job market, along with the inflow of HNWIs.

Rents in Dubai will further increase in 2023, particularly in the major markets where demand is outstripping supply, while the cost-effective locations are likely to watch moderate development in the rental.

Rents in Dubai were in a downward trend since 2014 but the recovery started after the CORONA, as several foreign employees returned with the recovery in the job market and an inflow of high-net-worth people to the market.

David Abood, partner at real estate consultancy core, foreign rents to increase in the board in 2023. “The major market is anticipated to constantly see high rents as demand for this component outstrips supply. With most of the upcoming supply handing over in the cost-effective and mainstream apartment districts, we hope this market component to watch relevantly moderate rental enhances,” stated Abood.

Ayman Youssef, the vice-president, of Coldwell Banker, looks at deluxe villas in major areas like Palm Jumeirah and Emirates Hills taking the most in cases of rentals next year. “The prime reason for it is the flow of wealthy expatriates from Ukraine and Russia who are a prime contributor to the recent inflation in the property market and we watch this movement showing an upward in 2023, as well. On the flip side, beachfront properties, skyline views, and gated communities are even likely to be more in demand and which would subsequently direct to a subsequent increase in rents,” stated Youssef.

As per Richard Waind, group managing director at Better homes, there are signs that rents are now initiating to level out, with enhancement in the past three months of only under 2%. “With under 30,000 new houses to be given in 2023 and very few townhouses or villas communities, this is no doubt that well-based houses have seasoned the high rent costs. I hope that scenario plays out through 2023. High renewal rates will exacerbate conventional villa communities’ shortage of rental stock, placing further upward force on rents.”

Rents Lower than 2014 Level 

Despite the enhancement, real estate sector managers state that rents are still decreased to their 2014 level. “Rents fell between 2014 and 2021, and while rents have enhanced in all communities over the previous 24 months, rents remain under their 2014 level. Apartments, especially, have a certain manner to go back to the last highs. In Dubai Marina, for instance, average rents are Dh121,000, 9% below their 2014 level, while JLT and Sports City rents stay 30% and 40% behind, relevantly.” Stated Richard Waind.

Citing another instance, he stated that estimated rents in Arabian Ranches recently stand at Dh 217,000, 6% below their last level witnessed in 2014.

David Abood states certain mid-market districts are still under their 2014 level values, comprising villa districts like JVC, Meadows, and The Spring and apartment districts like Dubai Sports City, JLT, JVC, and Discovery Gardens. “When in comparison to 2014 level values to 2022, this is vital to remember that there were more than 200,000 lesser units in the market and almost 102 million little tenants than today. Hence, the recent rental values show a much more mature market with robust socio-economic aspects highlighting the growth of the city.”

Cost-Effective Locations in Dubai 

Real estate sector managers disclosed that there are still several locations in New Dubai and Old Dubai where rents are under their 2014 level.

David Abood of Core states the formation districts of Deira, Bur Dubai, and freehold, districts comprising International City, Liwan, Discovery Gardens, Dubai Silicon Oasis, and Dubai Sports City are among the very cost-effective apartment districts in Dubai.

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