The report by AirDXB looked at key trends impacting the short-let market in Q2, such as a surge in property transactions, with May seeing a 76% increase YoY. Meanwhile, villa sales declined by 31.7% across the quarter YoY.
This, the report said, shows that apartments are where interest lies, both to live in and as business investments. AirDXB saw heightened levels of interest in the short-let market, particularly with first-time buyers looking to supplement their income, secure an asset and meet mortgage repayments without tenancy and contractual obligations.
AirDXB’s report also highlighted that long-term rental contracts decreased in value. For example, the average rental contract in Dubai Marina stood at AED 5,000 – less than it was in Q1. The report attributed this to residents in Dubai tiring of paying high prices and the perceived lack of real value. It tied this to the increase AirDXB saw in the purchase of apartments, highlighting that many residents would prefer to pay their own mortgage than rental prices. The report predicted this to be the start of the market normalising in terms of long-term rentals, increasing the value of short let.
The report contended that the success of Dubai’s short-let market was partly down to a consistent stream of tourists. The report called attention to the fact that Ramadan, which is considered a habitually slow period, saw a record number of visitors, with 1.35 million people visiting Dubai during the holy month – a 19% increase from 2022, and a 50% increase from pre-pandemic figures.
The AirDXB report also highlighted that Dubai claimed the title of the world’s most popular tourist destination for the second year running, while Dubai International Airport remained the busiest international airport for nine years running. It concluded that this busyness in Dubai was good news for short lets.
The report also identified the short-let market as cyclical, meaning that colder months would out-perform hotter months, even if Q2 2023 saw a greater number of tourists than previous years. As AirDXB expected, average daily rates across the market were lower in Q2 than in Q1 – by 31%.
The report also noted a drop in occupancy rates across Dubai, however, these were 3% better for the quarter YoY. It was also reported that AirDXB’s average daily rates remained consistent for the quarter YoY and that their clients had consistently higher occupancy rates than market average, with up to 55% higher occupancy rate across the quarter, meaning strong returns for their clients during the low season.
The report also indicated that the short-let market remained a strong property investment for those considering selling the property in the short to mid-term. It highlighted that there can be up to a 15% increase in sale price for buyers looking for chain-free property acquisitions, and that last year alone, AirDXB’s boutique investments advisory arm advised on 77 property transactions – amounting to over AED 100m of assets.
AirDXB describe themselves as a fully independent, unbiased advisor for those wishing to sell properties, as well as those who need advice on where best to purchase for maximum returns on the short-let market.
