Q3 has been a good month for the UAE property sector, where the rentals in posh communities of Dubai showed a steep climb. According to Bayut.com it is expected to continue in Q4 as well. The situation in Abu Dhabi however is still in the favour of tenants as the state continues to face oversupply which resulted in a decline in both its rentals as well as prices. This report is based on the findings of 603,165 unique searches made for Dubai and Abu Dhabi rental properties on Bayut.com.
Both buying and rental search trends at Bayut.com have depicted a very happening UAE realty market in Q3.The signs of growth in Dubai’s rental market, which was first predicted in Merrill Lynch’s report earlier this year, have finally begun to be more evident as Bayut.com unravels the pattern of its search trends.With an increase in Dubai rentals, Bayut recorded a spike in its rental trends for both Dubai and Abu Dhabi where 603,165 visitors were interested in rental properties during Q3 as opposed to 589,056 unique visitors who were looking to buy property in both the cities.
The dropping Abu Dhabi rentals have resulted in the state becoming more tenant-friendly. Resultantly, Bayut recorded higher activity for rental properties in Abu Dhabi where all top three locations i.e. Al Reem Island, Al Raha Beach and Khalifa City A got a stellar start in Q3, registering 100, 99 and 76 popularity index (PI) points on the charts respectively. In July, Al Reem Island occupied the top spot by attracting 4204 unique visitors, followed by Al Raha Beach with 4149 and Khalifa City A with 3184. According to Jones Lang LaSalle report of Abu Dhabi property market, residential market has suffered a 48% decline in its rental value since its peak in 2008 and it might just as well continue to face this trend in Q4.
The upward rental trends continued for all three localities of Abu Dhabi as Al Raha Beach got 4873 unique hits, which was higher than the numbers posted by July’s top performer Al Reem Island (4005), to claim the top spot with 100 PI points. In September however, Khalifa City A outperformed the rest with 5145 prospective tenants, leaving behind both Al Raha Beach (4775) and Al Reem Island (4389) which claimed second and third position respectively. As per Bayut Rental Trends, Khalifa City A has generally been a consistent performer in Abu Dhabi throughout 2012 which claimed a hundred PI points in 9 out of 12 last months.
In Dubai however, both the rents and search trends were on the rise. While throughout the Q3, top 3 developments retained their ranks but demonstrated an increase in their PI points as well visitors. Dubai Marina, which is the overall top development in Dubai with flat 100 PI points throughout 2012, received 22,135 unique visitors in July and this number swelled to 24,856 in September.JLT, which retained its second position in Dubai rental trends during Q3 bagged 41 PI points in July and gained four solid points in August. The number of visitors interested in JLT properties also went up with the rents as the number of its unique visitors increased from 8,516 in July to 10,443 in September. Both Dubai Marina and JLT are primarily apartment communities where more and more investors are keen to buy property for investment purpose which is also reflected in the REIDIN Index which shows a 5% increase in apartment rentals.
This notion is confirmed from the Q3 report of Jones Lang LaSalle as per which the high-end locations continue to see improved performance. Princess Tower, the tallest residential tower of the world, has only just been completed and delivered in Dubai Marina during Q3. Soon after its completion, it became the most sought after residential tower in Dubai Marina and was ranked nicely on Bayut charts. Orra Marina Tower was the second most notable tower which was handed over in Q3 in Dubai Marina. With controlled supply and good quality of construction, high end apartment communities performed well throughout Q3 where the rental prices increased by as much as 7%, as per the Q3 report released by Asteco earlier this month.
For the residential sector, REIDIN Rent Index too depicteda general upward trend and a 7% increase in Dubai rentals was noticed on year-on-year basis. According to the experts at Bayut.com, as far as the recovery is concerned, Dubai’s residential sector has very clearly started treading on a path towards recovery, as is evident by this report.