Dubai City Apartments

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Despite warnings to the contrary, rentals on many categories of Dubai city apartments have been rising. Particularly high-end Dubai city apartments and new properties have been witnessing consistent increases in rentals.

Greater Supply of Apartments in Dubai City

Recently, investors have been cautioned of rentals of Dubai city apartments softening. Later this year, a large number of new Dubai city apartments are expected to enter the market. This could lead to an unprecedented situation of supply outpacing demand for apartments in Dubai city. However, many agents and realtors report that whilst rents for mid-market Dubai city apartments have seen lower percentage increases, high-end Dubai city apartments’ rents have increased considerably over the last year. For example, in Old Town Burj Dubai, rental rates of a two-bedroom flat jumped from an average of Dh145,000 last year to Dh175,000 earlier this year.

On the other hand some experts insist that the impact of new units on rentals of apartments in Dubai city is mere speculation. They are of the view that landlords command high rents on Dubai city apartments because inventories are still low and new supply will only ease the gap. Louise Pitt of the leasing department at Landmark Properties said her firm is working hard to meet demand by renters because housing stock is still tight. Rental rates, she said, are really still as varied as are the types of apartments and neighbourhoods in Dubai city.

Rental Cap Impact on Dubai City Apartments

Dubai city apartments have seen incredible hikes in rents recently. To stem inflation, the government imposed a 5% cap on rent increases. This seems to have stabilised the market, however, landlords of new apartments in Dubai city continue to ask for high rents. Most buy-to-let investors continue to be bullish about Dubai city apartments because the market fundamentals are strong. The buoyant Dubai economy and steady increase in the expatriate population will ensure that Dubai city apartments will always be in demand.