The real estate rental market in Dubai, UAE, is likely to witness a price correction and it might be faster than expected, said a key regional developer.

The H Holding Enterprise, a leading investment firm operating in the Middle East is predicting major changes in the realty market in 2016 as far as rental prices are concerned.

The mother company of Omega Real Estate said that thousands of new apartments and villas to be completed this year will increase supply.

This delivery of residential units that are ready to be rented in 2016 will affect rental prices, it stated.

Property expert JLL predicted that average housing rents in the city would continue to fall by as much as 10 per cent over the coming 12 months.

“According to Asteco, 12,000 apartments and 2,000 villas expected to be completed this year,” says Hafeez Abdullah, the chairman of ‘The H Holding Enterprise’.

“The decline in rent prices could raise the emirate's competitiveness over other regional and global markets, and might encourage more people to benefit from this most significant drop since 2011,” noted Abdullah.

“We can say that the rental market is currently in a healthy state and will continue to remain so. The price correction is due to the delivery of a huge number of residential and offices units in 2016,” he added.

Earlier in 2015, Moody’s Investors Service had dubbed the slowdown in Dubai's real estate market as a positive sign in the long run, as it would give the market time to absorb the existing supply pipeline.

"Estimates show that in 2014, over 140 nationalities had invested Dh218 billion ($59.3 billion) in the emirate’s real estate market. We saw new investments methods facilitated to encourage more investors to come," remarked Abdullah.

For example, Dubai has allocated over 100 hectares of land for affordable housing, mostly to meet the demand for dwellings for people earning between Dh3,000 and Dh10,000 ($817 and $2,721) per month. These efforts will pay off gradually,” he added.-TradeArabia News Service