The end of 2015 and first quarter of 2016 has witnessed a significant drop in the prices of real estate business in Dubai and this can be largely attributed to the increased establishments that are being setup. Most notable real estate experiencing a major drop are the apartments and villas with their numbers in the establishment phase increasing and projected to be taken up by investors due to the increase in demand.
A look at the numbers defining the real estate market in Dubai reveals that at the moment, the rates for real estate are 7% higher than at the same period in 2013.
This is a significant margin to consider since the real estate market has been flooded by new entries majorly focusing on villas and apartments. Investors in real estate have been enjoying a steady setting of having villa rents up by 4% while the rents for office space were characterized to be up by 12%.
Due to the increased presence of more establishments, a 5% drop margin is expected in this first quarter of 2016 which will mean tenants will get to have a reprieve in terms of the rates they will have to shoulder.
With the construction of 12,000 apartments and in excess of 2,000 villas already in place and scheduled to be completed in this calendar year, an influx in the number of real estate options for tenants is bound to increase which makes for a scenario whereby the rates will fall further.
An increase in the construction volumes for real estate in this area will mean that there will be more than enough supply but with a demand that is not increasing in the same wavelength. This is what will be sure to drive the rates of the rent prices down.