More tenants in Dubai are renewing their residential leases as rents continue to rise, with a 14 per cent annual increase in the number of renewals in the second quarter of this year, according to a new report.
City-wide rents rose for the 14th consecutive quarter, property consultancy Cushman and Wakefield Core found.
Apartment rents are up by 22 per cent compared to the same period last year, its report said, and villa rents rose by 13 per cent year-on-year.
“Household incomes are not keeping pace with rising rents, which is further contracting disposable incomes,” Prathyusha Gurrapu, head of research and consulting at Cushman and Wakefield Core, said.
“Similar to the trends seen in the sales market, rents in the mid-market apartment districts, such as Discovery Gardens, Dubai Sports City and Dubailand, saw the steepest rise, whereas prime districts saw lower levels of increase.”
This week, Abu Dhabi launched the emirate’s first residential rental index, aimed at providing indicative rental values for tenants and landlords in different areas of the capital. The Rental Index is available online at the Abu Dhabi Real Estate Centre’s website www.adrec.gov.ae.
Rents continue to rise in Abu Dhabi. Apartment rents increased by 2 per cent annually in Abu Dhabi during the second quarter, while villa rents jumped 5 per cent, according to the latest report from Asteco.
Dubai's Real Estate Regulatory Authority updated its rent calculator earlier this year. The Rera calculator, which was recalibrated on March 1 to become more representative of open-market pricing, is revised periodically.
Residential sales prices in Dubai continued their upward trajectory for the 16th consecutive quarter with a 21 per cent year-on-year increase, according to the Cushman and Wakefield Core report. However, it said, prime districts saw a relative moderation in sales price increases, while mainstream and affordable districts are witnessing steep increases that are impacting their affordability.
The study found that Dubai remained a strong global ultra-prime market, with more than 305 residential properties sold for above Dh20 million in the second quarter, a 12 per cent annual increase. However, there has been a marked slowdown in off-plan transactions over the last two quarters.
“This is mainly due to the lower off-plan inventory available in the market for these ticket sizes. That said, secondary market ultra-prime transactions have retained their steady activity levels with 135 transactions,” Ms Gurrapu said.
During the second quarter, only 5,391 units were delivered compared to more than 8,350 in the preceding quarter, the report said.
A total of 24,300 residential units are anticipated over the remainder of the year, bringing the annual total to nearly 39,000 units, which is similar to 2023 and in line with market demand.
“Growing from a high base, new project launch volumes continue to see record numbers with a 42 per cent annual increase, as demand and absorption remain buoyant,” Ms Gurrapu said.
“We have also seen developers with large landbanks initiating projects and smaller private developers aggressively acquiring land, which continues to be a challenge to source.”
Until the end of 2021, the differential between off-plan transactions and secondary market transactions was limited. However, over the last two to three years, off-plan transactions have sharply increased, underpinned by the rise in new project launches.
Ms Gurrapu said that while secondary market transactions recorded a moderate growth of 5 per cent, off-plan transactions saw a substantial spike of 61 per cent.
In the second quarter, off-plan transactions accounted for more than double the number of secondary market transactions, indicating that the off-plan market has a higher share of investors compared to end users, she added.
“Primary off-plan sales prices [inventory sold by developers] are higher than secondary off-plan prices [resales by individuals] across most Dubai districts and off-plan projects,” the report said.
“Although the percentage difference is still in single digits, it suggests that sellers are struggling to match original prices and selling slightly below market value to exit.”
Other indicators of market stabilisation include a higher number of sales listings with no change in prices in the first half of 2024, while a much lower number of listings saw prices increase compared to the same period, according to Cushman and Wakefield Core.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
BUNDESLIGA FIXTURES
Friday Hertha Berlin v Union Berlin (11.30pm)
Saturday Freiburg v Borussia Monchengladbach, Eintracht Frankfurt v Borussia Dortmund, Cologne v Wolfsburg, Arminia Bielefeld v Mainz (6.30pm) Bayern Munich v RB Leipzig (9.30pm)
Sunday Werder Bremen v Stuttgart (6.30pm), Schalke v Bayer Leverkusen (9pm)
Monday Hoffenheim v Augsburg (11.30pm)
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Greatest Royal Rumble results
John Cena pinned Triple H in a singles match
Cedric Alexander retained the WWE Cruiserweight title against Kalisto
Matt Hardy and Bray Wyatt win the Raw Tag Team titles against Cesaro and Sheamus
Jeff Hardy retained the United States title against Jinder Mahal
Bludgeon Brothers retain the SmackDown Tag Team titles against the Usos
Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe
AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out
The Undertaker beats Rusev in a casket match
Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match
Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last
ESSENTIALS
The flights
Fly Etihad or Emirates from the UAE to Moscow from 2,763 return per person return including taxes.
Where to stay
Trips on the Golden Eagle Trans-Siberian cost from US$16,995 (Dh62,414) per person, based on two sharing.
Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Draw
Quarter-finals
Real Madrid (ESP) or Manchester City (ENG) v Juventus (ITA) or Lyon (FRA)
RB Leipzig (GER) v Atletico Madrid (ESP)
Barcelona (ESP) or Napoli (ITA) v Bayern Munich (GER) or Chelsea (ENG)
Atalanta (ITA) v Paris Saint-Germain (FRA)
Ties to be played August 12-15 in Lisbon
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The story of Edge
Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, established Edge in 2019.
It brought together 25 state-owned and independent companies specialising in weapons systems, cyber protection and electronic warfare.
Edge has an annual revenue of $5 billion and employs more than 12,000 people.
Some of the companies include Nimr, a maker of armoured vehicles, Caracal, which manufactures guns and ammunitions company, Lahab
