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In the wake of the general property market slowdown which became even more pronounced by mid-year 2015, a lot of industry experts predicted that both sale and rental rates will continue on a slow downward trend towards the end of the year to continue in the next year as more incoming supply gets realised.
And while market sales prices did fall accordingly as buyers continued to take a firm stance opting to wait things out as relatively better-priced off-plan projects were launched and ready property alternatives began offering what appeared to be more financially manageable payment alternatives, rental rate fall across the emirate remained scattered and distinctive.
As observed in recent news, rental rates for studios and one-bedroom units in places like Bur Dubai have shrunk by as much as 26 per cent, while one-bedroom rentals on Shaikh Zayed Road, Dubai International Financial Centre (DIFC) and Downtown Dubai areas have fallen by about 8.5 per cent. In Jumeirah Lakes Towers (JLT), the same trend is reflected in the one-bedroom segment with rent prices falling by about 2.5 per cent. Reasonable rental rates have only been more or less consistent in communities located in the Dubailand Residence Complex with studio, one-bedroom and three-bedroom units down by 15, 3.5 and 2.9 per cent, respectively, according to reports.
Even with a lot of media focus on the urgent need for affordable housing in the truest sense of the word since late last year and well into 2015, the so-called affordable options remain elusive even to the middle income segment as 64 per cent of the population only receive average monthly salaries of Dh3,000 to Dh10,000 per month as per data by the Dubai Statistics Centre, and this percentage falls to only 40 per cent when the lower class segment is excluded.
Based on standard calculations, housing expenses ideally take up approximately 30 per cent of a person’s monthly budget.
• Rents expected to continue downward trend with more incoming supply
• Rental rates even in high-demand areas like Shaikh Zayed Road see a decline
• Property developers now focusing on providing affordable residential projects
Source: Claire Dangalan, Special to Properties
The writer is a freelancer