Tuesday 23 July 2024

UAE property market kicks off on positive note

DUBAI, February 20, 2017

With a rather topsy-turvy 2016 behind it, the real estate market in the UAE is expected to take positive strides in 2017, according to a report.

Given the uncertainty prevalent in the global market, many realty investors are heading to markets that offer stability of rental returns as well as room for capital value growth, stated UAE-based property portal Bayut.

Dubai and Abu Dhabi rank prominently among such markets, and their unique position on the map and importance as the gateway to the Middle East and North Africa (Mena) region make their pull even stronger, it stated.

Dubai began the year on a high note, as its real estate sector witnessed transactions worth Dh12 billion ($3.2 billion) in the first 15 days of January. The emirate’s rental apartment segment saw a marginal decline of three per cent in average rent compared to the mean value in December 2016, however, individual categories posted healthier numbers.

On the other hand, the average apartment rent in Abu Dhabi grew three per cent overall, climbing to Dh120,000 against the December 2016 value of Dh117,000.

On Dubai's real estate market, Bayut said the rental apartment market saw growth in individual categories, however, the overall average rent dropped three per cent to Dh114,000 from the December average of Dh117,000.

Average rental yield for all apartment types topped out at 5.72 per cent, but yields in individual bed categories and areas went as high up as 8 per cent and 10 per cent respectively.

In the studio apartment category, average rent was recorded at Dh51,000 per annum, down 4 per cent from the December mean of Dh53,000.

The units returned owners an average rental yield of close to 8 per cent. Rent for 1-bed units surged during the month, going up 5 per cent to Dh90,000 from the previous mark of Dh86,000. Rental returns maxed out at 7.1 per cent for these apartments, said Bayut in its report.

There was a 2 per cent improvement in average rent for 2-bed units. With rental yield at 6.2 per cent on average, unit owners earned an average of Dh137,000 during the year. Three-bed unit rents also increased 2 per cent to land at the Dh191,000 mark on average, while the yield was recorded at 5.34 per cent, it stated.

Larger units in the 4+ bed category commanded an average rent of Dh344,000 and returned a rental yield of 4.25 per cent. The average rent for the unit type was 10 per cent more than the December 2016 value, the report added.

The top localities for renting apartments in January were Dubai Marina, Bur Dubai, Jumeirah Lakes Towers (JLT), Downtown Dubai and Dubai Silicon Oasis.

On the Abu Dhabi scenario, Bayut said the apartment rental market in the UAE capital took an upward turn with the start of the New Year, as overall average rent increased by three per cent to hit the Dh120,000-mark, while average rental yield was recorded at 6.4 per cent.

The average studio unit rent held its ground at Dh48,000 when compared with the mean value in December 2016. But a 4 per cent increase in the average price of studio units meant the rental yield dropped to 6.4 per cent on average.

The average rent for 1-bed units in Abu Dhabi moved up 1 per cent from the December mean, arriving at the Dh85,000 mark in January.

The rental yield for the category remained attractive at close to 7 per cent. However, 2-bed units saw average rent falling by 2 per cent to Dh122,000, while the rental yield for the category was recorded at 6.6 per cent, said the UAE property portal.

Three-bed apartments’ average rent also came down by one per cent to Dh164,000, but rental yield remained lucrative at 6.3 per cent, it stated.

Larger apartments falling in the four- bed category commanded an average rent of Dh217,000 in January, earning unit owners an average rental return of 5.3 per cent.

The top localities for renting apartments in the UAE capital last month were Al Reem Island, Corniche Area, Khalifa City A, Al Khalidiyah and Al Raha Beach.

On the future outlook, Bayut said: "Given the strength of its diverse economy and the ability of the country’s various public and private economic segments to continue churning out work opportunities, we believe the UAE’s allure to the global expatriate community will only grow stronger in the years to come."

The unique edge the country has in the shape of Expo 2020 will always come into play, but the UAE’s economy has generally exhibited resilience in the face of international turmoil over the past months, and that is what inspires investor confidence, it stated.

As both Dubai and Abu Dhabi remain regional powerhouses for leisure, trade, manufacturing and business services, the influx of global talent will continue to have a positive bearing on the real estate sectors in the two main emirates, helping them stay well clear of troubled waters, it added.-TradeArabia News Service

Tags: UAE | abu dhabi | Dubai | property market |

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