Dubai rental prices to fall 30% - EFG Hermes

zoom

RENTAL LOWS: EFG-Hermes has predicted that rents will fall 30 percent this year. (Getty Images)

Dubai rental prices could fall as much as 30 percent this year as the emirate suffers from a real estate price correction and its population declines, EFG-Hermes said on Tuesday.

Inflation in the second-largest Arab economy could fall to 8.5 percent this year from 13.2 percent in 2008, the Egyptian investment bank said in a research note.

"(Dubai) rental prices will see a sharp decline of up to 30 percent, down from an estimated 15 percent rent rise in 2008," EFG, an Egyptian-owned investment bank, said.

"We are forecasting that Dubai's population will fall in 2009 as the outlook for most key sectors deteriorates and with the current correction in the property sector."

But a housing shortage in UAE capital Abu Dhabi would continue to be "acute" and rents there could rise 10-15 percent this year, EFG said.

Residential property prices in former boomtown Dubai have fallen by about a quarter since peaking last year, Morgan Stanley said last month. (Reuters)

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Stubborn landlords
Posted by Rental Bubble to Burst, Dubai on Monday 16 March 2009 at 14:50 UAE time


I think some landlords still haven't caught on to the fact that prices will fall. Our rental contract is also expiring shortly, and our landlord is still asking for one cheque. i think the landlords will have a rude awakening once the mass exodus happens in May/June when the school year ends!

Dubai rental prices to fall 30% - EFG Hermes
Posted by UK, Dubai, UAE on Tuesday 10 March 2009 at 12:41 UAE time


Such predictions have become common, and in reality too, rents are dropping. RERA must come out with the revised INDEX that will refelct the situation. RERA's present index has considered only the interests of landlords. RERA's index considred the maximum possible rent in each area (Rent for a 1 BR apartment in Qusais was 75 TO 80K !!!) without considering old buildings, amenities offered etc. Thanks to the downturn, the tenants have been offered a life line. I hope RERA will also make it mandatory to include provisions to cancel the contract with some notice period. This is necessary as the job market is likely to deteriorate through at leat first half of 2009.

Some Places...
Posted by Rainigade, Dubai, UAE on Tuesday 10 March 2009 at 12:17 UAE time


Some places more or less than others. Its very weird, because our rental agreement comes up for renewal in May and when I called my landlord's company to find out what rental relief we could expect, it was only AED 2000!!

Strangely enough, a brand new building just down the road from us that has been ready since November, has a drop of 40% rent now.

I shall be voting with my feet!

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM