Average rents for apartments in International City jumped 35 per cent year-on-year, beating upscale communities such as Downtown Dubai and Dubai Marina, according to a new report.
Among villa communities, Springs is the clear winner, registering a 34 per cent increase in the last one year, Asteco report reveals
Overall, apartment and villa rents are below Q3 2008 levels by 38 per cent and 31 per cent, respectively.
But, recovery is well under way with a year-on-year growth of 23 per cent for apartments and 19 per cent for villas, the Dubai-based real estate consultancy said in its latest report.
In the apartment segment, average rents for one-bed units in International City hit a high of Dh32,500 per annum in Q3 2013 compared to Dh23,000 pa in Q3 2012.
Rates for two-bedrooms rose to Dh50,000 pa from Dh38,000 pa.
However, compared to the peak rates of Q3 2008, rents were still lower by 52 per cent. One- and two-bed units were being leased for Dh70,000 and Dh92,500 pa, respectively, at that time.
The second highest rental increase among apartments was witnessed in Jumeirah Lakes Towers (JLT) with average rents rising 28 per cent in past 12 months.
One-bed units are now available for Dh62,500 pa in Q3 2013, compared to Dh50,000 pa in Q3 2012.
Rents for two- and three-bed apartments now stand at Dh85,000 pa (Dh70,000 pa) and Dh120,000 pa (Dh95,000 pa).
In 2008, Asteco states rents for one-, two- and three bed units stood at Dh110,000 pa, Dh160,000 pa and Dh210,000 pa.
Dubai Marina took the third place. The master development, termed the tallest block in the world by UK-based consultancy EC Harris, saw 25 per cent rise in the past one year.
Currently, average rents for one-bed units is Dh80,000 pa (it was Dh70,000 pa in Q3 2012).
Two- and three-bed apartments are now being rented on average at Dh112,500 pa (Dh90,000 pa) and Dh150,000 pa (Dh125,000 pa), respectively.
Lease rates in Dubai Marina are still 36 per cent below the highs of Q3 2008. One-, two- and three-bed units were then leased for Dh130,000 pa, Dh180,000 pa and Dh245,000 pa, respectively.
Mirdif follows Springs
Among villa communities, the three bedroom Springs villas jumped by 34 per cent to Dh165,000 pa in Q3 2013 compared to Dh125,000 in Q3 2012. Rents remained 36 per cent below Q3 2008 rates.
Mirdif came in second, rising 31 per cent year-on-year. Average rents for three-bed units were at Dh120,000 pa compared to Dh90,000 pa in Q3 2012. Four and five-bed units were being rented for Dh145,000 pa and Dh170,000 pa.
Palm Jumeirah and Arabian Ranches saw 16 per cent and 17 per cent increase year-on-year, but were still 10 per cent and 28 per cent below average rents achieved in Q3 2008.
Renting a five-bed villa on the Palm was the costliest among the communities with average lease rate being Dh600,000 pa with Jumeirah Islands available for Dh375,000 pa.
Knight Frank earlier reported that Dubai was the best performing rental markets in the world, with rents rising 18.3 per cent in the year to March.
Asteco report goes on to emphasise that the market will continue to record rental growth as economic improvements fuel internal demand as well as result in new arrivals.