One-bedroom apartments in the UAE have recorded the highest increase in residential rents, driven mainly by heavy demand from single expatriates migrating to the country.
This was the conclusion of the annual research carried out by Dubai-based property services company, Asteco. The report shows that one-bedroom apartments in Dubai, Abu Dhabi and Sharjah saw an average increase in annual rental prices of 29 per cent, 33 per cent and 40 per cent respectively in comparison to last year.
Asteco’s research team compared the 2006 second quarter residential rental prices of one, two and three-bedroom apartments in Dubai, Abu Dhabi and Sharjah over a 12-month period.
“The majority of the working population in Dubai have been compelled to move to Sharjah due to the unavailability of apartments and high rents in Dubai. This is one of the main reasons why demand for apartments in Sharjah has risen so much, subsequently pushing up rent prices,” said John Allen, Director Consultation, Research and Valuations, Asteco.
Sharjah’s Al Rolla area recorded the highest increase in one bedroom rents from AED18,000 in 2005 to AED32,000 this year – a jump of approximately 78 per cent. This year, the highest annual rental increase for one, two and three-bedroom apartments was reported in Sharjah with an average increase of 35 per cent, followed by Abu Dhabi and Dubai at 29 per cent and 25 per cent respectively.
Areas in Dubai commanding the highest annual rent include the much sought after Sheikh Zayed Road, Dubai Marina and The Greens. The average rent for a three-bedroom pad on Sheikh Zayed Road shot up from AED120,000 last year to AED170,000 today, while two bedroom rents in Dubai Marina shot up an average of AED23,000.
The Greens recorded the highest increase in rents for two and three-bedroom apartments with rents at around AED125,000 and AED145,000 – a 74 per cent and 53 per cent increase over last year’s prices respectively.
Allen added: “More than 280,000 residential units are expected to come up by 2009. This will definitely meet increasing demand and help stabilise rental prices in the UAE.”
Projects such as Discovery Gardens, Green Community, The Views, International City, Jumeirah Lake Towers and Dubai Festival City will definitely help ease the pressure, added Allen.
In Abu Dhabi, prime locations include the Corniche and Hamdan Street with prevailing rents of AED80,000 for a two-bed and AED150,000 for a three-bedroom apartment. Popular areas in Sharjah include Al Nahda and Majaz areas while Al Khan recorded the lowest residential rent increase – approximately 5 per cent.
Founded in Dubai in 1985, Asteco is the UAE’s largest property services company. Its services include retail, commercial and residential sales and leasing; strategic consultancy; property management and marketing; feasibility studies and valuations; and research and investment.