The prices for leasing residential property in Dubai have still not reached a bottom, despite declining around 45 percent in some areas from their 2008 peak. Cluttons’ report into the Dubai property market during the first quarter of this year revealed that residential rents had dropped by an average of 5.5 percent during that period. Property sales were down by an average 2.9 percent. The research note added that the glut of new homes coming online in Q2 would see rent prices dropping still further, and added that the appetite for off-plan development had showed no sign of returning.
Meanwhile, the report also said that commercial rents have slipped by fully 25 percent, and Cluttons warned that only established locations such as DIFC and some areas within TECOM are maintaining over-90 percent occupancy levels. The real estate agency said that it estimated only twenty percent commercial occupancy levels in the newer Jumeirah Lakes Towers district. As free zone landlords are not allowed to lower the cost of rents below AED140 per square foot, the report also indicated that contractual ‘rent-free’ periods – of as much as six months - are becoming more and more commonplace.
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