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The cost of renting apartments in Dubai continued to slow down in the first few months of the year, contrary to speculations that the property market is heading towards a turnaround.
According to the latest data, apartment and villa rents dropped by at least 5 per cent in February compared to a year ago. Rental figures for flats registered a 5.4 per cent year-on-year decline, while villas posted a 5.7 per cent decrease.
The Rental Price Index by Reidin, a major real estate data provider in Dubai, dropped by 0.9 points, from 99.3 to 98.4, representing a decline of 0.93 per cent in February. Overall, rental numbers slipped by 5.5 per cent year-on-year.
In Abu Dhabi, the rental index posted an increase of 1.1 points, from 65.8 to 66.9, an increase of 1.69 per cent in February 2016. Overall, figures posted a minimal increase of 0.9 per cent year-on-year.
Some industry sources had earlier claimed that Dubai’s property market is likely to stabilise, as more properties are expected to come through this year. According to property portal Bayut.com, apartment rents in Dubai actually increased by 3 per cent in January. The company said that rental values will likely stay “more or less steady” over the course of the year.
However, other analysts have argued that a recovery is not likely to happen in the near term. A separate report from Core, UAE associate of Savills, said that both prices and rentals in Dubai’s property market will likely soften further over the next 12 months. The observation is echoed by other analysts who are monitoring the real estate market.
According to Alp Eke, senior economist at the National Bank of Abu Dhabi, a further two per cent to three per cent reduction in rents is likely to happen this year.
Source: Cleofe Maceda, Senior Web Reporter, gulfnews.com