(MENAFN- Khaleej Times) Average rents in Dubai and Abu Dhabi witnessed modest declines during the third quarter of 2016 compared to previous quarter, according to real estate website Bayut.com.
Average rents in Dubai fell by two per cent in the quarter while rental values in Abu Dhabi dropped by four per cent.
"The correction in rents could also be a result of a consistently growing set of tenants now looking to become homeowners by opting for numerous rent-to-own offerings by several developers," the real estate site said in its quarterly report.
Dubai Marina, Jumeirah Lakes Tower and Downtown Dubai remained top spots for property buyers and renting apartment.
Dubai South appears well set to become the next investment hotspot in Dubai, as ambitious project launches by developers such as Emaar hint at exciting times for the locality in the wake of the World Expo2020 and increasing demand for Al Maktoum International Airport.
"Considering the host of project launches and persistent interest of local and real estate developers, it is safe to say the UAE realty sector is headed in the right direction and better times are around the corner," the report said.
Dubai market
A studio unit rent was down two per cent in Q3. The units were being rented out for an average of Dh55,000 in Q3 compared to their Q2 average of Dh56,000. One-bed apartments witnessed a greater drop of eight per cent, with the average rent recorded at Dh92,000 compared to Dh100,000 in Q2. The average rent of two-bed units recorded a slight one per cent drop in average rent, so did three-bed units.
Average yield for studio units in Q3 was six per cent, while that for one-bed units remained at 6.6 per cent. Two-bed units offered owners a rental return of six per cent and the yield for three-bed units was recorded at 5.5 per cent. The largest apartments, the 4+ bed category returned an average yield of four per cent.
Abu Dhabi market
Al Reem Island, Al Raha Beach, remained top attractive localities for property buyers and renting apartments.
Despite regional instabilities, the property market of Abu Dhabi managed toward off all turbulence and stood strong enough to be a buy-to-let heaven with rental yields averaging at seven per cent and going as high as eight per cent in certain bed categories.
Due to the limited residential supply, apartment rents remained stable throughout the first half of the year, but compared with Q2 2016, Abu Dhabi experienced a four per cent downward adjustment in the average apartment rent in Q3 2016. Compared with Q2, apartment prices in Abu Dhabi increased 2.2 per cent in Q3 2016 on average.
The average studio rent in Abu Dhabi adjusted six per cent downwards to Dh56,000 in Q3 2016, while rental values of one-bed apartment also followed suit and came down six per cent to Dh90,000. Two-bed and three-bed apartment rents fell to Dh133,000 and Dh170,000 respectively, registering decreases of one per cent and six per cent. Average rental yields in Abu Dhabi remained lucrative as ever at seven per cent.
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