The property market in Dubai has been teetering on the brink of ruin for two years now. According to an Arabian Business survey, yearly rents in budget neighborhoods of Dubai have dropped below AED15,000 (about $4,084). However, luxury rentals continue to make headlines for big money deals. Recently, a 12-bedroom villa with 10,000 square feet of space in Jumeirah managed was leased for an annual sum of AED2.5 million ($680,698). The home included a garden, four living rooms, separate staff quarters, a playroom and a 10-car garage. All this for a monthly rent of ED208,333 ($56,724).
The Jumeirah villa is not alone. Other luxury villas like a seven-bedroom villa in the posh Emirates Hills is available for AED1.5 million ($408,419). Similarly, an 80th-floor apartment in the Burj Khalifa complete with a hot tub, a private terrace and fantastic views of the Dubai Fountain is available for AED800,000 ($217,823). The steep prices, however, are representative of only a small fraction of the Dubai rental market. There may not be rising demand for such properties, but there is always a superrich taker. The major portion of the Dubai rental market, however, has seen annual rentals plummet below AED15,000.
The breach between the two ends of the rental spectrum is staggering. However, according to some industry watchers, these could be early signs of stability. Dubai’s property market has been through turbulent times in the past two years. But the average decrease in prices is lower this year, and averaging at 2%. Some areas recorded drops of up to 7%, but overall there is reason for optimism. Renting has become easier, with tenants accepting available rental amounts. Thus, transactions have increased, spelling good news for homeowners. Greater stability over the coming months, would bode well for the luxury sector as well, and perhaps push prices further upwards.
Via: Arabian Business