The increase in rental prices that all the well-known areas in Dubai have faced has now also impacted Dubai South.
Long-term residents of the vast mixed-use development have been noticing the impact, as their lease agreements are being extended at rates 15-20 percent higher than their previous payments.
This has been especially evident in renewals completed during the summer.
Sources in the property market indicate that rental prices in Dubai South are increasing as landlords are charging higher rates for lease renewals. This is in accordance with the leeway granted to landlords by the updated RERA Rental Index, which became effective in April.
A broker mentioned that you had current tenants paying 20 to 30 percent below the market rate for a Dubai South apartment. Usually, these were renters who had signed leases 2-3 years ago and were paying the same rent prices as during the Covid year. Everything has been different since April.
New tenants too are paying a premium
Dubai South is seeing a large number of new homes being completed, with a significant portion now being rented out. Data from Reidin-GCP shows that in July, there were 425 new home leases signed at the master-development, the second highest monthly number since January’s 471 new leases.
“A representative from Reidin-GCP stated that rental transaction volumes in Dubai South have been steadily increasing every month for the past year.” “This shows not just how desirable the different community living options are, but also the growing number of choices available for tenants to select from.”
It is anticipated that Dubai South will become the main focus for the middle- and upper-middle income housing market, leading to a steady rise in popularity. In August, initial predictions indicate that over 500 new leases were agreed upon.
Feedback from new Dubai South residents indicated that the rents being offered were much higher than those available in January or February. “The broker mentioned that everything was different following the April RERA Rental Index update.” “There was an increase in new leases as well as renewals.”
How do the rental prices appear?
Presently, available properties in Dubai South include a one-bedroom for Dh58,000 and a two-bedroom for over Dh80,000 annually. The high demand for staff accommodation for newly completed buildings is further increasing pressure on rental values.
Even with the completion of new apartments, landlords in the area have not lowered their rental prices at all.
Lease extensions
Many current residents who selected Dubai South for its reasonable rental prices still find it financially wise to extend their lease. Excluding April, the number of lease renewals for Dubai South homes consistently exceeded 250 per month, reaching a peak of 309 in May and closely followed by 294 in July, as reported by Reidin-GCP data.
