Resident relief as rents stagnate

RENTS STAGNATE: Dubai rental prices have not increased significantly quarter-on-quarter so far this year. (Getty Images)

Rental prices in Dubai have stagnated for a second consecutive quarter as the emirate’s rent cap and tighter rules and regulations take affect, property services firm Asteco said on Wednesday.

Asteco said in its quarterly report that the emirate saw “no significant residential rental increases” quarter-on-quarter in the three months to the end of June, continuing a trend that began in Q1.

Marcus Arbourne, head of research, consultancy and valuation, told Arabian Business tenants are choosing to stay put rather than move to take advantage of the “relative security” of the rent cap, which currently stands at 5 percent.

Arbourne also said authorities are increasingly cracking down on unscrupulous landlords, which has resulted in fewer tenants moving.

He said that rental price stagnation could continue in the third quarter and possibly the fourth, depending on how much new housing stock comes onto the market.

“There is a [large] volume of new stock coming to market and when that does... it will be leased at market value [rather than restricted by the rent cap].

“There has not been that huge delivery of stock to the market yet, that’s coming over the next 12 to 18 months and will certainly have an impact on rentals. You will see significant rent rises.”

Asteco said year-on-year rents in Dubai climbed by almost 22 percent, driven by areas such as Sheikh Zayed Road, which recorded the highest annual rental growth of 51 percent.

It said Bur Dubai and Ghusais followed close behind with yearly rent increases of 42 percent and 40 percent respectively.

Other areas such as the Greens, Satwa, Muraqqabat and Garhoud saw around 10 to 15 percent year-on-year growth in rental rates over the second quarter of 2007.

Downtown Burj Dubai, Sheikh Zayed Road, Jumeirah Beach Residence and Dubai Marina recorded the highest rents, with two-bedroom apartments renting for between 140,000 dirhams ($38,000) and 220,000 dirhams a year.

The lowest prevailing rents continued in International City and Deira for studios and one-bedroom apartments.

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READERS' COMMENTS

Rent stagnating? What planet are you from again?
Posted by rh on Sunday 27 July 2008 at 00:31 UAE time

I've had to threaten my landlord with lawsuits for the three years I've been renting to keep the rent increase to 7 then 5%, this year is my third and last and I'm dreading my next move - it'll be an extra 40K I'm going to have to pay up - in one cheque that is.
What I really don't understand is how rent is still increasing but what is increasing even more is the number of "TO LET" signs! there are about four or five building here in Barsha that have been empty for at least 6 months - and then the agents tell you "all has been rented"
What this city needs is a body who will act as the one source of information on apartments available for rent. There are plenty of places for rent, you just can't know where they are!!!
The day will come when the bubble will burst.

Rent stagnating?
Posted by sid, Sharjah on Friday 25 July 2008 at 15:10 UAE time

We've had our rent in Sharjah increased every year since 4 years ago, when we moved our new villa. It's always been between 10-13% per year, which we could handle. This year, after much talk and negotiating, it was increased by 18%.
I wouldn't call that 'stagnating'

Rents = Money Grabbers
Posted by ian on Friday 25 July 2008 at 11:42 UAE time


I can only speak of Dubai and the thought that I shall be seeking alternative accommodation in the near future fills me with horror.

Not only are the house prices criminally over-inflated - for extremely poor quality construction but', we have speculating, greedy, individuals called 'landlords' appropriating the hard earned wages of people looking for a roof over their heads.

Time is long overdue that the various 'watchdog's actually bared their 'teeth' and pulled all involved into line. The problem might not be so prevalent if there were less individual private landlords as landlords with large portfolios (Companies) could probably be policed better than the individuals and their brokers who also seem to earn their money easily (I think in the real world these 'people' are called leeches')

You are dreaming !
Posted by Nickyp on Thursday 24 July 2008 at 18:13 UAE time

Resident's relief? Who made that headline up? How many residents did he/she interview? I have just had the typical 'evacuation' notice: after asking "why, and come on, what do you really want?". Result: 80% increase to my last rent. Stagnating? Don't talk rubbish.

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