Dubai’s office rents have dropped by 18 percent in the first quarter this year. Matt Green, Associate Director of CB Richard Ellis said to media ” This is the first time in a long period of time that commercial office lease rates are recording a steady decline. The decline in rental prices in the office market is a first in the last four years.”
The major demand in office rental over the last few years were created by the construction boom. Many construction companies, real estate firms and architectural firms have helped to keep the market afloat while business was great. But since the global crisis has also taken hold in Dubai, this demand has slowly but surely dropped. Many companies are forced to cut back on their operating expenses in order to save themselves.
Companies in the finance sector and the real estate industry are most affected by this change in demand and this has also seen a roll-on effect to other industries.
And Residential Rentsâ€¦.
The National also reported an alarming trend in residential rentals which are falling as more and more expats were leaving Dubai. In the first three month of this year property prices have tumbled by 41 percent and many projects have had to be cancelled due to a shortage in finance.
Other projects are massively delayed and they are not likely to be fast-tracked as developers scramble to get finances approved. EFG-Hermes even stated this year that Dubai’s population will fall by 17 percent this year alone. These figures are certainly not promising and time will tell how bad the situation really is in the emirate.
Photo credits: Octal via Flickr