Dubai rents hit $3,500 per month

Rental accommodation in Dubai now averages almost $3,500 (AED 12,850) per month, according to figures from consultancy firm ECA International.

The price tag makes the emirate the 14th most expensive city in the world for tenants, behind places such as Hong Kong, Tokyo, New York City and London. ECA surveyed 92 cities around the world, basing its figures on the average price of renting a three-bedroom apartment.

The firm said rental prices in Dubai have increased approximately 100% in the last decade. This increase was not as high as that in Doha, where the average rent rose 130% in the same period.

Despite such a large increase, Doha still ranks behind Kuwait City, Jeddah and Abu Dhabi, according to the ECA survey. The average rental price in Doha now stands at $2,246, compared to $2,429 in Abu Dhabi, $2,476 in Jeddah, and $2,594 in Kuwait City. Muscat was judged the Gulf's cheapest location in which to rent accommodation, and the sixth cheapest in the world.“Dubai and Doha have seen unprecedented growth in recent years as they establish themselves as premium business centres and luxury cities,” the report stated. “This development, coupled with a continued influx of expatriates, has resulted in new very high standard properties being erected, driving up the average rental price.” In an effort to control rental costs, authorities in Abu Dhabi and Dubai have introduced annual rental caps on residential properties.

In Dubai the government cut the cap by more than half at the beginning of this year. Landlords are now only allowed to increase rents by a maximum of 7% per annum, compared with 15% last year.

Many analysts believe that rental costs in the UAE could fall or at least level as more properties in its well-documented construction boom are completed. A rental cap may then become unnecessary.In another survey released this week, property consultancy CB Richard Ellis found office rents in Abu Dhabi surged by an average of 103% over the 12 months to May this year — a higher increase than anywhere else in the world.

Source: Arabian Business