Wealth Monitor April 2016 | Page 19

The Two-Speed Market The gulf in property values and rentals had widened last year in the UAE, especially Dubai which, of late, is showing signs of narrowing. The latest trend is the softening of the asking rents in many micro markets of Dubai. “As of Q4 last year, median asking rents were 2.3% less than the quarter prior to it, 5% less than Q4 2014 and 10.4% less than the same period two years ago. This can be explained by analysing at the new supply coming online in some locations, providing more options for tenants, and by the long vacancy periods some landlords initially opted for to secure higher income, then realizing that a slightly lower asking rent would reduce the vacancy,” reasons Haider Tuaima, Head of Research at ValuStrat. April 2016 | www.wealth-monitor.com A recent report How Average 2BR Apartment Rentals by Emirates Have Moved Across UAE Since 2008 NBD ‘Dubai Real Estate Update: 250 Feb 2016’ also 200 confirms that the pace of the price 150 decline in Dubai’s residential sector 100 is stabilizing 50 in Feb 2016. Residential 0 property prices Dec Dec Dec Dec Dec Dec Dec Dec have remained 2008 2009 2010 2011 2012 2013 2014 2015 relatively Dubai Abu Dhabi Al Ain Ajman Fujairah unchanged in Sharjah New Ras Al Khaimah New Umm Al Quwain February 2016 The luxury (premium) segment in the with apartment villas sector was more resilient at -9.1% prices down -12.1% y/y and villa prices y/y while the standard segment of the down -10.9% y/y, according to Phidar apartments sector also softened at -7.6% Advisory’s Dubai 9/5 House Price y/y in February 2016. The strength of Index, which is based on Dubai Land Department (DLD) data but includes only the US Dollar is a constraint on demand, nine apartment comm [