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Demand for villas up as rents fall
Increase in supply likely to continue downward price trend, say industry professionals.
June 22, 2010 2:52 by Samuel Potter
Villas in Dubai are seeing a rise in demand as rental rates fall, reports Emirates Business.
“Villa rentals are looking very attractive at the moment. With a further supply of villas to enter Dubai, rentals are expected to decline although at a slow pace,” Mohanad Alwadiya, Managing Director of Harbor Real Estate, told the paper.
According to the company, an estimated 3,500 to 4,000 villas could enter the market by the end of the year.
“This could trigger a 10 percent further decline in villa rents. However, villas are strong assets for Dubai and demand for villas is always likely to be higher than apartments,” said Alwadiya. “If there is any correction in rental rates for villas it is only because it is a natural market situation.”
Kosta Giannopoulos, Manager-Residential Sales & Leasing, Better Homes, said: “It is difficult to quantify how much further villa rentals will decline but due to the increase in supply due to the handover of more projects such as Shorooq, Layan, Jumeirah Village, The Villa, Cedre Villas, etc and the stagnation of demand, we would expect continued downward pressure on rents.”
“In Dubai’s Mirdiff area, a four-bedroom villa with an area of 3,000 square feet space is currently going for a rent of around Dh120,000 per annum,” Giannopoulos said. “Other attractive four-bedroom rentals in Dubai are Dh136,000 per annum for a 4,101 square feet space in Dubailand and Dh150,000 per annum for a 5,600 square feet area in Umm Suqeim.”
He said that rentals for a two-bedroom villa in Mirdiff with an area of 1,100 square feet space is currently going for Dh50,000 per annum while a two-bedroom villa with an area of 1,795 square feet space is going for Dh64,000 per annum.
“A three-bedroom villa in Mirdiff area with 1,590 square feet space is currently going for a rental of Dh80,000 per annum,” he said.