Dubai: The cost of living in Dubai is showing no signs of let-up, with the average villa and apartment rents going up nearly 18 per cent in the last 12 months.
According to the October 2014 results of the Dubai Rental Price Index by Reidin.com, apartment rental prices registered the highest increase, at 20.2 per cent year-on-year.
Villa rental prices, on the other hand, posted a 6.6 per cent year-on-year increase.
A month-on-month comparison of rents, however, shows that rates have not moved much between September and October. Apartment rents increased by only 0.43 per cent on a monthly basis in October 2014. The corresponding increse for villa rents was 0.29 per cent.
The percentages of increase quoted in the report are average estimates only and the exact figures may vary from one location to another.
The continued rise in demand for residential units in Dubai has somehow put an upward pressure on rental costs. New properties have recently been launched in Dubai, with some of them snapped up within hours of launch.
Just last month, Emaar Properties and Dubai Holding kicked off the sale of two residential towers in Dubai Creek Harbour at The Lagoons, following the “overwhelming investor response” to the launch of the first tower. The project occupies a land area of 6 million square meters and will feature the next tallest twin towers in the world.
With investor interest growing, sales prices of residential units in Dubai increased by 24.2 per cent year-on-year, according to Reidin. Apartment sales prices registered the biggest increase, at 26.9 per cent, while villa sales prices jumped by 14.4 per cent.
In Abu Dhabi, rental costs increased 8.1 per cent year-on-year. Rental prices for villas jumped considerably at 11.5 per cent, while apartment rental prices showed a meager 1.5 per cent adjustment.
Rising rents are driving some residents out of Dubai. In a recent MoveSouq.com survey of 300 residents in Dubai, 65 per cent of the respondents said they plan to transfer to a new place once their lease expires.
Nearly eight in 10 residents (75 per cent), whose rents have gone up by more than 10 per cent, are the ones more eager to pack up and move to a more affordable location.
The majority of the respondents said their landlords had increased their rent this year. About four in ten (36 per cent) of the respondents experienced an adjustment of between 1 and 10 per cent, while another 48 per cent said their rent had gone up by more than 10 per cent.