Dubai: The decline in apartment rents in Dubai has slowed down in October, as investor confidence is returning to the emirate’s property market, according to an industry report.

Real estate analysts are also seeing property values stabilising, as demand from investors in some overseas markets, as well as from expatriates living in the UAE, is also on the rise. However, uptake from certain buyers based overseas remains subdued.

As of October this year, the average house rents in Dubai dropped by a negligible 1 per cent compared to the third quarter average. However, compared to September, rents posted an uptick, with flats across all bed categories averaging Dh124,000 in October, an increase of 1 per cent from a month earlier.

“The real estate market in Dubai appeared to be making strides towards recovery. There was a noticeable slowdown in the rate of price drops and a visible uptick in average rental values, following months of continued downward movement,” said real estate portal Bayut.com.

The overall month-on-month increase in apartment rents has been driven mainly by the price movements in smaller properties. Annual rents for studio units averaged Dh56,000 in October, showing an 8 per cent increase compared to September and a 2 per cent rise over the average rent recorded in the third quarter of the year.

Annual rents for one-bedroom apartments, which averaged Dh92,000, also posted a 1 per cent increase in September compared to the third quarter average. Bigger units, such as two-bedroom and three-bedroom units, registered a 1 per cent decline.

As for house prices, apartments posted a paltry decline of 1.2 per cent during the same period. The same trend has also been observed in Abu Dhabi, where rates registered a 0.7 per cent drop.

“Considering the recent project launches, the inclination of developers to market more and more projects to first-time home buyers and genuine end users, and the robustness of UAE’s various economic sectors, it is safe to say that the real estate market is heading towards maturity, one where genuine demand from stakeholders regulates supply,”Bayut.com said.

Craig Plumb, head of research at JLL Middle East and North Africa (Mena), said that there has been an increase in “activity” from the Chinese, Saudi Arabian, Iranian and African markets in recent months, which is somehow compensating for the slowdown in Russian and British demand.

Russian buyers accounted for 7 per cent of total residential sales in Dubai at the peak of the market in 2014. Plumb noted that the percentage has fallen back to around 4 per cent in the first half of 2016.

There has also been a “marked” decline in the number of British investors this year, as the devaluation of the pound resulting from Brexit has hurt the buying power of residents in the UK. “Investors from the UK accounted for more than 10 per cent of all transactions in 2013 and 2014, but less than 7 per cent in the first six months of 2016,” Plumb told Gulf News.

“While the devaluation of the pound and the rouble has reduced demand from investors, it has not deterred British or Russian citizens living in the UAE from buying real estate here for their own occupation. Indeed, there has been increased demand from some end users seeking to take advantage of the lower prices to switch from the rental sector.”