What was the general market movement in Q1?
Rental rates continued the downward trend experienced during 2018, according to brokers.
Apartment and villa rates in Dubai both fell 3 per cent between January and the end of March compared to the fourth quarter of last year, property servies company Asteco said. JLL Mena meanwhile reported a 1 per cent fall across both segments in the first quarter.
Chestertons reported that apartment and villa rents were down 2 per cent quarter-on-quarter.
The companies' figures were similar for year-on-year, with Asteco finding an 11 per cent drop on average for apartments and 9 per cent for villas, while JLL said apartments rents were down 12 per cent on average, with villas falling 5 per cent.
What else did the property companies have to say?
Asteco noted that while the fall in rents were similar to previous quarters, it found "a marked squeeze in demand at the upper end of the rental range with an increasing number of (price-conscious) tenants opting for lower price points, irrespective of location, size or quality".
It added: "The number and range of incentives has increased with rent-free periods, now of up to three months, being the most popular. Others include the absorption of agent fees, lower security deposits and the inclusion of DEWA bills, maintenance or chiller charges."
JLL said it expects rents to continue to face downward pressure in 2019 "with supply exceeding demand".
Short-term Airbnb style rentals are becoming more popular, according to Chestertons, with this type of deal attractive to those doing project work in the city, or workers still on probation and thus in some cases unable to commit to an annual contract.
The company also expects to see momentum in rent-to-own schemes which will prove attractive to residents on a decent salary but without the necessary cash reserves for a deposit of 25 per cent. These deals are currently available in areas such as Jumeirah Village Triangle, Palm Jumeirah and Dubai Sports City.
There's been mention of a three-year rent freeze...
Indeed, the Dubai Land Department confirmed at the beginning of May that it is studying a proposal to freeze rents for three years after landlords and tenants sign rental contracts.
"The new rental law and the three-year contract that the Land Department is drafting is being studied by the relevant departments," a DLD spokesperson said. "The new law will be formally issued in the near future."
It is not clear at this stage where the rent freeze would just be residential or whether it would apply to offices and retail outlets as well.
How does the supply situation look for the rest of the year?
Quarterly supply more than doubled in the first quarter to in excess of 6,700 units, the majority of which were apartments, Asteco said. An additional 7,500 villas, predominantly located along the E311 and E611 corridors, are expected to be ready during the remainder of the year, while the company predicts the overall completion rate to reach more than 25,000 for 2019. This compares to its figure of 14,000 last year.
JLL Mena gave a figure for the first quarter at just under 10,000, with major project completions including Al Khail Heights, Bluewaters Island and Arabella villas in Mudon.
It said the total residential stock is at 530,000 and is expected to reach 652,000 by the end of 2021. It is, however, cautious in regards to delivery times and said developers have "slowed down their launches".