The start of the New Year brought glad tidings for many Dubai residents who were feeling rather pressed by the steady escalation of rents throughout 2015, said a property expert.

The Dubai Real Estate Regulatory Agency’s rent calculator reported declines in various Dubai localities in January 2016 and Abu Dhabi’s Urban Planning Council’s new laws came into effect on January 1 that aim at regulating realty developers in order to make investors’ capital even more secure, stated UAE-based property portal Bayut.com.

These developments have certainly had a positive effect on the real estate sector in both Abu Dhabi and Dubai, it stated.

According to Bayut, localities offering affordable rental options are fast gaining popularity among tenants.

In January, Bayut.com noted Dubai apartment rents declining in certain bed groups while increasing in others. Average apartment rent in Dubai across all bed categories remained close to Dh138,000 ($37,561).

The number was a three per cent increase over average apartment rent of Dh134,000 ($36,472) at the end of December 2015.

As the prices in Dubai’s real estate market have been experiencing soft adjustments over the course of the outgoing year and rents remaining robust, the return or yields for investors in the apartment category have become highly attractive.

On average, apartment yields across Dubai were estimated at a little over six per cent, although the yields go up to 10 per cent depending on location and quality of projects, said the Bayut report.

"However, not all individual bed categories posted increases in rents. In our month-on-month study, we found average annual rents for studio apartments at about Dh59,000 ($16,059), a negligible one per cent decrease compared to December 2015," it added.

According to Bayut.com’s search trends, Dubai Marina remained the most popular locality for renting apartments in Dubai, followed by Jumeirah Lakes Towers.

Bur Dubai, Downtown Dubai and Business Bay rounded up the list of top five localities for renting apartments in January 2015, in that order, it stated.

On the Abu Dhabi scenario, Bayut said as the previous year saw rents across the UAE capital rise unabated, January brought some relief as supply and demand forces resulted in a downward shift in apartment rents.

Apartment rents across all but the three-bed category saw declines in values, and could be a hint of the market adjusting to normalise the inflationary value gains it amassed last year.

Average apartment rents fell five per cent in the UAE capital, down from a December average of Dh141,000 ($38,378) to Dh135,000 ($36745) in January.

According to Bayut.com’s study, annual rents of studio apartments in Abu Dhabi averaged Dh64,000 ($17,419) in January 2016, posting a 3.6 per cent decline in value compared with December 2015.

One-bed apartments and two-bed apartments saw respective falls of 1.3 percent and four per cent, with average rents at Dh99,000 and Dh136,000 ($26,946 and $37,017) in the first month of the year.

Only the three-bed category managed gains, registering a 2.3 per cent hike in value that made average rents climb to Dh192,000 ($52,259), while the 4+ category saw the biggest decrease of 4.6 per cent, the rents falling down to Dh252,000 ($68,590).

In terms of popularity Al Reem Island, Al Raha Beach, Al Reef, Al Ghadeer and Saadiyat Island remained the top five localities for renting apartments in Abu Dhabi.

On the 2016 outlook, Bayut said the ongoing slowdown of global economy had certainly affected demand in realty markets across the world.

A rallying dollar and rising interest rates coupled with falling oil prices have not only made international purchases costlier but have also forced several economies relying on oil exports for growth to introduce monetary and fiscal tightening, it stated.

"The liquidity shortage will remain a challenge in the ongoing year, but Dubai and Abu Dhabi might well be in the clear, thanks to their limited – and in Dubai’s case, five per cent – dependence on oil," said the expert.

The UAE property portal said the governments remain committed to persisting with major projects and continuous developments in diverse sectors such as the real estate, financial, services, industrial, healthcare and tourism/leisure are driving both job and economic growth.

Dubai and Abu Dhabi will continue to be the regional business and innovation hubs and keep attracting human capital from across the world, helping their realty sectors with a constant demand and impetus to keep on building, it added.-TradeArabia News Service