By Peter Harrison www.business.maktoob.com
DUBAI – Dubai’s Real Estate Regulatory Authority (RERA) has set property rents in some areas of the city as much as 22 percent lower than in April, the agency’s new index shows.
Rents in Al Barsha, an area close to the train station at Mall of the Emirates, saw an increase of four percent, but below the 10-20 percent increase for such areas predicted in a study by real estate consultancy DTZ last month.
The index acts as a general guideline for landlords and tenants.
The RERA rental increase calculator on its website on Thursday showed significant differences in the rental range for many areas of the city compared to the authority’s rental index published in April.
But there has been a slowdown in the rate at which rents have fallen. Dubai rents are down more than 50 percent from their peak due to an oversupply in the market.
There has been no formal notification that the rental index has been updated, but the figures have changed since April when the index was last updated.
RERA’s rent calculator shows that the rent of a four-bedroom villa in Al Barsha is in the range of 220,000-250,000 dirhams ($59,945-68,119), up from 200,000-240,000 dirhams.
In Umm Suqeim the rent for a two-bedroom villa remained steady in the range of 145,000-175,000 dirhams.
The decreases have been noted in areas such as International City where the range of 35,000-45,000 dirhams has dropped 30,000-35,000, while the rent of a one-bedroom apartment in Dubai Marina has fallen by more than 8 percent from the range of 80,000-120,000 dirhams, to 70,000-110,000 dirhams.
The first index, published in January, was widely criticised because it used prices from 2008 peaks, not reflecting the huge drop in rental rates amid the economic downturn.
Dubai rental rates fell about 3 percent in the third quarter of 2009, suggesting that rents might possibly be starting to level, compared to the nearly one third during the first three months of the year, according to property consultancy Asteco.