July 23rd, 2017 by Own A Space
During the second quarter this year, the rents of the apartments, villas, and offices fell and it can witness further drop, according to a new report. Reconfirming the earlier research done regarding the rents under stress for the rest of the year is because of the new supply increase.
In the second quarter, the apartment for rents in UAE went down by 4%, while the prime and high-end properties witnessed a 3% drop. The mid market properties faced a softening of 5%. Around 600 apartments were handed over and 2000 additional units are estimated to be finished in the coming 6 months which would result in further pressure on rates. This year will go to be challenging for the Dubai real estate industry.
The rents were declined in the second quarter and the trend is likely to persist for the remaining year. The leasing contractor said that the rents in Abu Dhabi we expected to decrease throughout 2017 because the companies were cutting costs. Many expatriates have left and because of this, the rents decline.
Picture Courtesy: www.dayofdubai.com
High-end apartments, according to Asteco in Central Abu Dhabi recorded 4% decline and of Corniche-2% and Khalidya and Bateen-2% respectively. For lower end properties, the rental decline in the similar locations was subdued relatively at 2%.
Though the sales of the apartments were relaxed by 4% quarter by quarter and 8% year by year, the sales activity was marginally improved after the developers offered more competitive pricing to the customers.
The office rents got down by 9% in the second quarter of the previous year with certain units discounted reportedly up to 15% below the rates prevailing in the market. However the demand is still strong for the smaller units, they are being offered with incentives to retain the tenants in order to negate the lack of new take up.
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