Dubai’s rental market witnessed an increase in rent activity in past two years, ending the negative growth cycle that began in mid-2015 till late 2021, said Dubai rental report 2023, from commercial real estate service provider CBRE on Thursday.
The report stated current rental market of Dubai has created a difference between new and renewed rental rates, as frequency of tenants renewing residential leases has increased drastically.
In the latest report of CBRE, a detailed analysis was shown to understand the recent trends of new and existing lease. Additionally, it provided an outlook on future of residential market. The research said it includes analyses of around 7 lakh residential rental transactions between January 2018 and July 2023.
Dubai Land Department said from January 2018 till July 2023, the total number of tenancy contracts reached around 3 lakh, a 43.5% increase from around 2 lakh contracts registered in the same period in 2019.
However, the report also said there is a significant fragmentation within the rental market, where a total number of new contracts registered dropped by 12.6%, while renewed registrations grew by 29%. This reflects how tenants are less willing to relocate to prevent additional costs occurring from acquiring new lease, despite having the advantage of Real Estate Regulatory Agency (RERA).
The rental regulation in general, limits annual rental increase permitted to a maximum of 20%, while the likelihood of achieving the highest rate of growth is rare in most cases said the CBRA report.
