Landmark’s new report on the Dubai market for June 2010 found that lower limits for a one bedroom apartment on the Palm Jumeirah were down 6% since the advisory’s previous report in April. One bedroom properties in Jumeirah Lakes Towers have dropped by 10% while in lower quality areas such as International City, upper limits for both studios and one-bed apartments decreased on average by 22%.
Prime areas ,with a limited supply pipeline,Â also are experiencing additional rent declines. Downtown Dubai has seen further rent drops due to continued supply entering the market in near by areas like Business Bay and Sheikh Zayed Road, the report noted.
“While these areas are not of comparable quality to Downtown Dubai, the impact on this increased supply is evident, lower limits for two beds in Downtown Dubai are falling five percent, at the same time that lower limits in Business Bay and Sheikh Zayed Road have fallen by 12% and 6% respectively since the beginning of May,” Jesse Downs, Landmark’s Director of Research & Advisory Services said.
As the competition to attract tenants has grown landlords have begun offering more concessions, including six-cheque contracts and incentives like rent free periods to assist tenants with days lost during the moving process.
“Unlike the trends in April 2010, where the rental declines were primarily restricted to lower and medium quality buildings, high quality buildings in good locations are also seeing rental drops,” Downs said. “While the falls are still marginal when compared to the drops in lower quality buildings, this is still a significant trend.”