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Dubai leads the world in rents growth in Q1
Rentals of premium residential properties in Dubai are up six per cent in the first quarter of 2014, says a latest rental index report
July 3, 2014 2:17 by kippreport
Dubai and Tokyo have taken the lead in global prime rents growth, with increases of six per cent and five per cent, respectively.
Nairobi has had the highest increase in the renting of high-class residences, with a 26 per cent boost between March 2013 and March 2014. However, Knight Frank’s index suggests that this rapid growth has hit a lull, with the prime rent growing by 2.1 per cent in Q1 2014.
For Dubai, this surge in top-flight accommodation renting has raised concerns, as “prime rents continue to outpace wage inflation”. With this in mind, residents and expatriates alike are now weighing up their options, deciding if they should stick with renting or if they should consider buying a property. It seems that domestic buyers, as well as expatriates are considering becoming homeowners. But, with the cap on mortgages, brought in by the Central Bank of UAE at the end of 2013 to reduce the risk to banks; as well as higher transfer fees, buyers are not rushing to make any purchases as yet.
Despite being some of the top cities in the world of finance, London, Singapore and Hong Kong all suffered from an annual decline in prime residential rents. London and Hong Kong saw slight gains in Q1 (0.1 per cent and 0.2 per cent, respectively) while Singapore’s premium homes renting declined by 0.6 per cent.
Even with these poor figures, Knight Frank’s research indicates that such financial centres will have steadier growth over the rest of the year. It says: “In London, the rental recovery looks to be taking hold as price growth starts to slow. New registrations are on the up 17 per cent year-on-year and tenant demand is coming from a diverse set of industries – oil and gas, mining and information technology.”