Dubai property market 'sees shift to rentals'

TENANTS SOUGHT: More completed projects in Dubai are being marketed for rent rather than sales as the market shifts. (Getty Images)

Real estate brokers in Dubai say they have noticed a shift in the market towards rental rather than sales, according to an industry expert.

The organiser of a property exhibition taking place in the emirate until Saturday said more and more properties being completed are being marketed for rent rather than being sold on.

Property Shopper event director Pooja Rajani said: “Looking at the global financial situation, there are many concerns regarding UAE property.

"Speaking to brokers, we have noticed a shift in the market; now that more and more properties are being completed, property owners are looking to rent their properties to manage mortgage repayments."

Rajani's comments come just days after Riad Kamal, the chief executive of construction giant Arabtec Holding, told Arabian Business that more developers would become more reliant on income from property rents as the housing sales market continued to slow.

Kamal predicted there would be a “healthy correction” of “very unreasonable” accommodation rents in the UAE as more residential developments were completed.

“There is a huge demand for rented accommodation and that’s what is escalating the rent today,” he continued. “What we are going to see is a healthy correction as more accommodation becomes available, helping to reduce the rents which today are just very unreasonable."

Forty real estate agents and brokers are taking part in the second Property Shopper event at the Grand Hyatt Hotel in Dubai showing residential and commercial properties across the UAE with a key focus on rentals and the emerging end-user market.

Vincent Easton, sales director at Sherwoods Property Consultants, added: “Contrary to popular belief not all property prices are falling in Dubai. We see a very clear end-user market emerging both in terms of rental, investors for buy to let and owner occupiers in projects that are completed or close to handover."

He added: "The fundamentals and dynamics of both living and working in Dubai are still strong meaning the medium to long term outlook for real estate investment remain sound.”

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READERS' COMMENTS

Shift to Rentals
Posted by KB, Abu Dhabi, UAE on Sunday 16 November 2008 at 08:44 UAE time


Obviously, owners have to rent properties out as banks announcing zero loan for apartments, who is going to buy.
Also, decisions by authorities make ready cash buyers think twice as at the moment decisions are in favour of developers and not consumers.

Shift to Rentals
Posted by Jack, Dubai on Saturday 15 November 2008 at 07:18 UAE time


Some banks have declared zero loans for apartment purchases and 50% for villas, fall back to rental is a pretty obvious assessment and direction to take...However...with major developers 'suspending' projects and laying off staff and because a good number of these developers haven't paid their consultants and contractors for some months, these sections of the industry will have to follow with redundancies too as companies cut back on their financial exposure.

Development and construction has been the main driver of the UAE economy, once this expat driven key component starts to 'shrink' and with no immediate prospect of picking up other work in the industry, people will have to leave.

This will have an enormous impact on all service and support industries, from food outlets to retail to rental...Been there, seen it, experienced it and have three T shirts. For those able to 'weather the storm', the landlords will be falling over themselves to have you rent their property. Agents are already hyping up the market rate on apartments on the back of single family occupancy, they would it's their business, wake up an smell the proverbial, it's not going to work this time round...End users...yes, but how many and what will they be doing..?

Me, I blame it on the Romans...what did they ever do for us..?

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