Dubai’s residential market is continuing to feel the pressure of a property oversupply, according to Chestertons. Its latest Dubai Q2 2018 report said overall rental rates for apartments and villas softened by 4% and 2% respectively quarter-on-quarter, while sales prices for apartments fell by 1% compared to the last quarter and average villa sales prices remained flat during the same period.

Chestertons said as affordability continues to dominate the residential sector, it was the mid-market segment which witnessed the largest uptake as it appears one-time tenants took advantage of a range of flexible and affordable payment plans and opted to buy.

“Affordability has undoubtedly been one of the top trends so far this year. What we’re witnessing, especially with the large amount of supply entering the market, is that developers are focusing on the investment-active, mid-market segment through a range of flexible payment options and smaller units to keep prices attractive; piquing the interest of would-be investors,” said Ivana Gazivoda Vucinic, head of consulting and valuations and advisory operations, Chestertons MENA.

The greatest decline in apartment rental rates was Dubai Sports City, dropping 7% with a one-bedroom unit available for AED 57,000 per annum (£975pm). This was closely followed by Motor City and Jumeriah Lake Towers where declines of 6% were witnessed, with the cost of renting a one-bedroom apartment now priced at AED 71,000 (£1,215pm) and AED 77,000 (£1,315pm) respectively.