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As rents at International City plunge further, Kipp takes a quick look at the going rate for the cheapest accommodation in the Emirate.
February 24, 2011 2:43 by Eva Fernandes
Kipp had coffee recently with a friend who had left Dubai at the peak of the boom. Said friend was considering renting a new apartment in the UAE and as the last time she had been actively looking out for flats was three years ago she still had the inflated price tags property used to go for in her head.
Kipp relished being the source of enlightenment and communicated the current state of the property market with plenty of theatrics and drama. And while our antics worked on her, it also worked on us, and we actually felt really amazed at just how low prices have dropped. So we thought we’d share our new found appreciation of the bargain prices with you dear readers.
The general rule for almost all property in Dubai has been a significant drop in rents since the crisis (although some areas have managed to hold their own). Those enjoying (or not, as the case may be) less sophisticated infrastructure took the worst beating. Take for instance, International City (in which Gulf News recently exposed ‘hidden urban squalor’); it has seen significant drops. A one bedroom unit at International City is down 60 percent from the rates at the height of the boom (now Dh25,000) with studio flats at International City now being offered for between Dh16,000 and Dh18,000 a year. Or how about Discovery Gardens? A one bedroom apartment at Discovery Gardens used to go for Dh75,000 but now landlords will be grateful to get even half of that, with the official rate going at Dh35,000.
But these are at one extreme end of the spectrum; the picture is not so bleak everywhere. As is always the way with the property sector, the drop in rent is particular to location, location, location. Charles Neil, CEO of Landmark Properties told Gulf News that quality and location are pivotal to the price of the rent: “But in the more established areas such as Emirates Living, Downtown Burj, villas, coastal properties and good-quality developments, lease rates are unlikely to decrease further.”
As such, well maintained areas such as Dubai Marina, Downtown Dubai, The Meadows, Arabian Ranches and The Springs haven’t seen too significant a drop in prices thus far. So while a two-bedroom apartment in Discovery Gardens goes for Dh55,000 to 80,000, and you can spend Dh60,000 to 90,000 for a two-bedroom apartment in Motor City, rents at the Burj Khalifa, which dropped dramatically towards the end of last year, have steadied at Dh80,000 for studio apartments, one-bedroom apartments starting at Dh120,000 and two-bedroom apartments from Dh190,000. Very definitely not bargain basement.
While the decline in price for buildings in Discovery Gardens and International City could be put down to the poor reputations the areas have gleaned since they opened, it’s interesting to note that even some brand new areas are struggling; we’re talking property that is just being completed and delivered into the market. For instance the rather huge development in Dubailand that counts for one-fourth of the total new supply pipeline in Dubai – an expected 4,000 to 6,000 residential units this year.
A studio apartment in Dubailand is being leased for between Dh22,000 and Dh35,000, a one-bed for between Dh35,000 and Dh55000, a two-bed goes for between Dh45,000 and Dh80,000 and a three-bed for between Dh90,000 and Dh110,000. A bargain, and with all that new supply, it means even more pressure on areas like International City and Discovery Gardens.