(MENAFN - Khaleej Times) Rents in Dubai are static after recording five months of declines, a Dubai-based investment bank said on Thursday.
In a research note, Al Mal Capital said, "rental yields remained flat in July versus June at a median rental yield of 6.8 per cent and compared to 7.8 per cent in July last year.
The report further said, "the year over year decline in rental yields has been driven mainly by higher prices as the median rent in Dubai has increased by roughly 23 per cent over last year levels."
Commercial properties showed a decline in the median rental yield to 11.9 per cent in July from 12.4 per cent in June. The seasonal slowdown continued in July with prices in the residential segment only increasing a moderate 0.7 per cent over last month. However the report pointed out that the office market remained "quite strong" recording a 3.7 per cent month on month increase.
Commenting on the outlook for the Dubai market it added that price performance in the real estate market "has already exceeded even our year-end target of Dh1,817 per square feet, published in the beginning of this year."
It added, "though Dubai has experienced significant yield compression (about 100 basis points) yields still have a bit to come down in our opinion (and) we still contend that yield compression will come from real estate price appreciation rather than declining rental prices."