Rental rate growth in Q1 2021 was nothing short of a mixed response with both positive and negative changes recorded within the community.
While the average rental rates for apartment and villa grew by 1% and 4% over the first quarter, annual declines remained in contraction at -10% and -2% respectively. Villa developments (both mature and emerging) recorded an increase in demand and consequently a rise in occupancy rates. This was mainly due to the changing working and living habits.
Average rental rates for apartments in Q1 2021 remained relatively stable with a marginal average quarterly decrease of -1%. However, annual rates continued to decline within the lower end of the market, with some buildings noting decrease of -10% to -15%.
Over the last three months there has been a steep rise of tenant movement with majority of tenants seeing to upgrade or upsize due to increased affordability within the mid to high end sector. Property owners continued to offer discounts in rental rates, flexible payments up to 12 cheques and incentives such as 2 month’s rent-free periods and waived commission fees.
Despite economic challenges posed by Covid-19, the impact on the Villa market was positive, reflected by an increase in demand within well-developed villa communities such as Yas Island, Al Raha Beach, Saadiyat Island and Al Reef community.
Information Credits: Asteco
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