The UAE’s property market witnessed mixed results in November with the pleasant weather having a galvanising effect on Dubai's real estate sector, while in neighbouring Abu Dhabi things seemed to be cooling down, said a report.

The real estate markets of the two main emirates of the UAE exhibited differing trends over the course of November. 

There was an upward movement in both rents and prices of apartments in Dubai, however apartments in Abu Dhabi underwent minor drops in both categories, stated UAE real estate portal Bayut.com in its study.

The real estate market in Dubai has been buoyed by a spate of recent project launches by noted names in the industry, a development that has stirred up interest in the market once again. Abu Dhabi, on the other hand, has not seen similar activity, resulting in a more stable market, it stated.

Dubai

While the beautiful weather was the obvious talk of the town throughout November, improvements in rentals and prices of apartments doubled the glee for landlords, said the UAE property portal.

Collectively, average apartment rents climbed to Dh127,000 ($34,567) in November, up two per cent over the average rental value in both October and Q3 2016. The average apartment prices rose by one per cent compared to October 2016, and by 0.3 per cent against the Q3 value, having a slight effect on the average yield, which was recorded at 5.7 per cent.

The average studio unit rent dropped two per cent to Dh55,000 in November compared with the previous month’s Dh56,000, but there was no change in the value when compared with the Q3 average. Average rental yield for the category was the best as always, at close to eight per cent, said the report.

The average rent for both one- and two-bedroom apartments registered a one per cent increase in value, hitting Dh93,000 and Dh145,000 marks, respectively. The averages for both categories were also a per cent better than the average rental values in Q3, it stated.

The average rental yield for one-bedroom apartments remained 6.8 per cent, while that for two-bedroom units was recorded at 6.1 per cent, the report added.

According to Bayut, the average rent for three-bedroom units improved two per cent compared to the October value to hit Dh203,000. This average rental also exhibited a one per cent increase compared to the Q3 value, landing at a decent 5.6 per cent per annum.

The bigger units, the 4+ bedroom category, experienced the biggest change in average rent, improving by 6 per cent compared to October 2016. The average rent of Dh313,000 was also 4 per cent higher than the average rental value of 4+ bedroom units in Q3 2016, but the yield for the category was low at 3.4 per cent.

The top rental apartment hotspots in November were Dubai Marina, Bur Dubai, Jumeirah Lakes Towers (JLT),
Downtown Dubai and Dubai Silicon Oasis

Abu Dhabi

The real estate market in the UAE capital had a stable month owing to a limited supply pipeline. At Dh129,000, there was a small month-on-month drop of one per cent in average apartment rents, and a similarly negligible drop when considered against the average apartment rent in Q3.

Overall, the average yield stayed stable at 6.75 per cent, said the Bayut report.

Rent for studio units in the emirate took a hit, dropping to an average of Dh54,000 from October’s Dh58,000. Average rental yield for the category also dropped to 7.4 per cent from the previous month’s 8 per cent.

At Dh90,000, the average rent for one-bedroom apartments was down a meagre two per cent from the October average, but the value was the same as the Q3 average. The average rental yield remained close to 7 per cent.

Average rents for both two-bedroom and 3-bedroom apartments were down 3 per cent in November, falling to Dh126,000 and Dh168,000, respectively. However, the rental yields for both categories remained attractive at 6.8 per cent and 6.4 per cent, in that order, it stated.

The average rent for the 4+ bedroom category dropped 7 per cent compared to the October value and two per cent compared to the Q3 average, landing on Dh236,000 in November. However, the category still offered a lucrative yield of 5.4 per cent.

Popular apartment renting localities in the UAE capital last month were Al Reem Island, Khalifa City A, Corniche Area, Al Raha Beach and Al Khalidiyah.

On the future outlook, Bayut said with the prices and rental values in Dubai’s real estate market making a marginal but steady recovery, the odds seemed to be in the emirate’s favour.

Riding high on its diverse economic portfolio, enviable lifestyle, its position as the regional business hub and its continuous utilisation of technology for socio-economic improvements, Dubai remains an international powerhouse sitting high on the global business and expat communities’ priority lists, it stated.

And despite a relatively stable month, Abu Dhabi continues to offer fierce competition to its neighbour on all economic fronts, including the real estate industry, stated the UAE property portal.

Having ably coursed its way through the oil price and liquidity crunch, the UAE real estate market is much more prepared to negotiate crises small and large, and heading towards a level of maturity that invites long-term investor indulgence, it added.-TradeArabia News Service