Dubai’s real estate market recorded its first quarterly fall in prime rents since 2011 in the first three months of 2015, according to a new report.
Knight Frank’s Prime Global Rental Index, which showed that rental values rose 1.4 percent over the past 12 months, also revealed a 0.6 percent drop during Q1.
“This was broadly in line with the UAE’s non-oil economy which grew at a notably weaker pace in the first quarter of 2015. This is likely to have hit confidence, and thus tenant demand for luxury residential properties in the emirate,” Knight Frank said.
Dubai was ranked the eighth best performing rental market out of 18 covered around the world during the first quarter.
A year ago prime rents worldwide were rising on average by 3.5 percent per annum but this figure has now slipped to 1.3 percent, its slowest rate of growth since the first quarter of 2010, Knight Frank said.
“The change is due to the slowdown in emerging markets such as Nairobi and Dubai which were seeing double-digit annual increases a year ago,” it added.
The number of cities recording flat or positive growth however has stayed much the same (14 of the 18 cities).
Tokyo led the annual rankings for the second consecutive quarter in Q1 with prime rents up 8.1 percent while Africa and North America recorded the strongest rise in prime rents of the world regions, rising on average by 4.3 percent and 3.2 percent respectively on an annual basis.