Bahrain
Kuwait
Oman
Qatar
Saudi Arabia
UAE
Print
Email
Discuss this article (19 Comments)Dubai rents plummet in new RERA index
by This email address is being protected from spam bots, you need Javascript enabled to view it on Wednesday, 29 April 2009
RENTS DROP: The rental guide price for a three-bed villa in The Springs has dropped by up to 50 percent.
The long-awaited updated RERA rental price index has been published, entitling tenants to up to a 50 percent discount on previously issued guidelines, Arabian Business can reveal.
The new index, which appears in the form a 'Rental Increase Calculator' on Dubai property watchdog RERA’s (Real Estate Regulatory Authority) website, allows tenants to negotiate significantly cheaper rents than the ones previously issued by the government body in January. Landlords use the index to set rents in Dubai.
Find out how much your rent should be, CLICK HERE.
Related: RERA's April 2009 rental index
Related: Interactive rental map of Dubai
To calculate whether you are liable for a rent increase in 2009, CLICK HERE.
A three bedroom villa in The Springs should cost between AED140,000 and AED160,000 a year, a maximum of a 50 percent discount on the previous guideline rent of AED250,000 to AED280,000.
A two bedroom apartment in the Marina on old pricing levels was AED150,000 to AED180,000 a year. Tenants can now expect up to 36 percent fall in rent of AED120,000 to AED160,000.
There has been weeks of intense media speculation over the release date of the new index and whether it would be completely updated to reflect cheaper rents amid the downturn, or just be expanded to include areas left out of the original survey.
Published three months ago, the first index which replaced the rental cap, was criticised because it used prices at the top of the market.
Brokers and industry figures thought the guidelines for rents were too high and failed to accurately represent the rapidly cooling market, where rents and prices have plummeted in the wake of a severe property downturn.
According to RERA, a four bedroom villa on the Palm Jumeirah should now be leased for AED300,000 to AED350,000, compared with the previously recommended rent of AED400,000 to AED500,000 - a reduction of up to 40 percent.
Residents at The Greens should now pay AED120,000 to AED140,000 a year for a two bed apartment, a maximum of a 36 percent drop on RERA’s last recommendation.
In International City, the real estate watchdog has slashed the price of rents by 22 percent, from AED85,000 to AED90,000, to between AED70,000 and AED80,000.
It has cut rents by the same amount at Jumeirah Beach Residence (JBR) to between AED140,000 and AED160,000.
While no rental index table has been published, the new prices are calculated by inputting information into a specially set-up part of RERA's website.
READERS' COMMENTS
Disclaimer: The views expressed here by our readers are not necessarily shared by ArabianBusiness.com or its employees.
RERA and its sense of humour!!
Posted by AW on Tuesday 26 May 2009 at 11:23 UAE time
I don’t understand why no one is giving RERA the due credit for their amazing sense of humour. I guess all of us should slowly realize the fact that the prime objective of RERA is not to regulate the real estate market but to amuse the residents/investors of Dubai.
Every day when we open our morning newspapers / website, the sweet PR guy from RERA has posted a sweet little joke which brings a slight smile on our faces in these times of economic downturn. I guess Dilbert does not know that he has some serious competition to his satirical cartoon humour. We all thought that only ex president George W Bush had the gift of verbal gaffes. Guys at RERA beat him hands down any time.
1. Early 2008 RERA says that they will regulate all rental contracts in UAE. (We all smiled)
2. Mid 2008 RERA says it has started working on a rental index which will stabilize rents. (We smiled a little more)
3. Late 2008 RERA asks residents to register their rent contracts after paying a fee! (We smiled some more. After all making some laugh is a tough job and entitles RERA to make some money for the same)
4. Late 2008, when the global markets and real estate started crashing like a doomed plane, RERA says that Dubai property will continue to appreciate. If not 50% atleast 25% in 2009. Basic laws of physics (gravity) and investment (all that goes up must come down as well) did not seem to apply to RERA’s thought process (We started grinning ear to ear)
5. Early 2009 RERA comes up with a Rental Index which is an average of the highest rents paid in every area. This average defied basic mathematics since the average ensured that rents of most residents actually increased by 20%! (This time we chuckled a little but still grinning ear to ear)
6. Early 2009 RERA states that Q2 2009 Rental Index will represent the real rents in Dubai. By then most of the rental contracts had been renewed at 120% of their previous rents. (Again we chuckled a little but still grinning ear to ear)
7. March 2009 RERA comes up with a rental calculator to ascertain rent for a certain area. Again in April 2009, RERA states that the calculator is the new Q2 2009 Rental Index. (We burst into a good laugh)
8. May 2009 RERA announces that it is to act as an international reference point for the region’s real estate sector. (We all throw into a fit of laughter holding our stomachs and wiping our happy tears)
Posted by AW on Tuesday 26 May 2009 at 11:23 UAE time
I don’t understand why no one is giving RERA the due credit for their amazing sense of humour. I guess all of us should slowly realize the fact that the prime objective of RERA is not to regulate the real estate market but to amuse the residents/investors of Dubai.
Every day when we open our morning newspapers / website, the sweet PR guy from RERA has posted a sweet little joke which brings a slight smile on our faces in these times of economic downturn. I guess Dilbert does not know that he has some serious competition to his satirical cartoon humour. We all thought that only ex president George W Bush had the gift of verbal gaffes. Guys at RERA beat him hands down any time.
1. Early 2008 RERA says that they will regulate all rental contracts in UAE. (We all smiled)
2. Mid 2008 RERA says it has started working on a rental index which will stabilize rents. (We smiled a little more)
3. Late 2008 RERA asks residents to register their rent contracts after paying a fee! (We smiled some more. After all making some laugh is a tough job and entitles RERA to make some money for the same)
4. Late 2008, when the global markets and real estate started crashing like a doomed plane, RERA says that Dubai property will continue to appreciate. If not 50% atleast 25% in 2009. Basic laws of physics (gravity) and investment (all that goes up must come down as well) did not seem to apply to RERA’s thought process (We started grinning ear to ear)
5. Early 2009 RERA comes up with a Rental Index which is an average of the highest rents paid in every area. This average defied basic mathematics since the average ensured that rents of most residents actually increased by 20%! (This time we chuckled a little but still grinning ear to ear)
6. Early 2009 RERA states that Q2 2009 Rental Index will represent the real rents in Dubai. By then most of the rental contracts had been renewed at 120% of their previous rents. (Again we chuckled a little but still grinning ear to ear)
7. March 2009 RERA comes up with a rental calculator to ascertain rent for a certain area. Again in April 2009, RERA states that the calculator is the new Q2 2009 Rental Index. (We burst into a good laugh)
8. May 2009 RERA announces that it is to act as an international reference point for the region’s real estate sector. (We all throw into a fit of laughter holding our stomachs and wiping our happy tears)
They keep trying....when will it stop?!
Posted by Al on Friday 1 May 2009 at 22:43 UAE time
Simple and short, they keep trying to push it and increase the prices and rent values. Either they're not in this world where we live in or they're in denial!...i wish i could reach someone there, and wake him up with some of the reality news. They prices are fake, and more then the market value by almost 40% and some cases 50% if not more. Anyways, they can try...but who will pay at the end? we will pay what it's worth, not what they want us to pay...the end
Posted by Al on Friday 1 May 2009 at 22:43 UAE time
Simple and short, they keep trying to push it and increase the prices and rent values. Either they're not in this world where we live in or they're in denial!...i wish i could reach someone there, and wake him up with some of the reality news. They prices are fake, and more then the market value by almost 40% and some cases 50% if not more. Anyways, they can try...but who will pay at the end? we will pay what it's worth, not what they want us to pay...the end
All Flats are not equal
Posted by Jean Paul, Dubai, UAE on Friday 1 May 2009 at 10:30 UAE time
I do agree with Joe.
We are comparing old flats with new flats with or without facilities. I tried to rent a two bedroom in Fairways (Greens) where the facilities are EXCELLENT, for a new friend of mine who, contrary to what the media implies, is still moving into Dubai (like many other thousands). The Fairways will rival the Marina Apartments for their facilities anytime. Are you saying that the price of Fairways should be the same as the price of Al Barsha area - does not make sense!
Also, compare the excellent facilities you get at the Springs (the best community facilities in town) (forget the temporary road works which once finished, will make Springs the best place to live). Do you really compare the Springs with Arabian ranches where you have almost zero facilities and you are paying 30% more? Where is the logic RERA? I rent in Springs and I would pay any price for it. I think the market will dictate the prices and yes, there are a few desperate guys who are lowering prices in panic - but these are not the majority and we cannot take their prices as the benchmark - let the market forces work - recession or not. I think the media is just wasting everyones time here with all their predictions and brainwashing - the market forces will still dominate in the next months to come and no RERA or UBS or Arabian Business.com can dictate what people should charge or pay.
Posted by Jean Paul, Dubai, UAE on Friday 1 May 2009 at 10:30 UAE time
I do agree with Joe.
We are comparing old flats with new flats with or without facilities. I tried to rent a two bedroom in Fairways (Greens) where the facilities are EXCELLENT, for a new friend of mine who, contrary to what the media implies, is still moving into Dubai (like many other thousands). The Fairways will rival the Marina Apartments for their facilities anytime. Are you saying that the price of Fairways should be the same as the price of Al Barsha area - does not make sense!
Also, compare the excellent facilities you get at the Springs (the best community facilities in town) (forget the temporary road works which once finished, will make Springs the best place to live). Do you really compare the Springs with Arabian ranches where you have almost zero facilities and you are paying 30% more? Where is the logic RERA? I rent in Springs and I would pay any price for it. I think the market will dictate the prices and yes, there are a few desperate guys who are lowering prices in panic - but these are not the majority and we cannot take their prices as the benchmark - let the market forces work - recession or not. I think the media is just wasting everyones time here with all their predictions and brainwashing - the market forces will still dominate in the next months to come and no RERA or UBS or Arabian Business.com can dictate what people should charge or pay.
RERA Index....
Posted by Ahmed, Dubai, UAE on Friday 1 May 2009 at 00:00 UAE time
I got excited reading the headline.. but short-lived..
Who is intrested in The springs, The marina, Palm jumerah... I mean comeon.. give me the rates for a single bedroom flat in Deria, Bur dubai, Satwa..
Posted by Ahmed, Dubai, UAE on Friday 1 May 2009 at 00:00 UAE time
I got excited reading the headline.. but short-lived..
Who is intrested in The springs, The marina, Palm jumerah... I mean comeon.. give me the rates for a single bedroom flat in Deria, Bur dubai, Satwa..
Click here to post a comment
MORE FROM ARABIANBUSINESS.COM
TOP IN MIDDLE EAST REAL ESTATE
TOP MIDDLE EAST BUSINESS STORIES
ALSO IN MIDDLE EAST REAL ESTATE
LATEST MIDDLE EAST BUSINESS NEWS
- Banking & Finance: Deal sought on Dubai World, Nakheel debts
- Banking & Finance: Arab youth SMEs turn to family finance
- Banking & Finance: Dubai raises further $5bn in bond sale
- Transportation: Shipping slump stops Bahrain's new port signing main liner
- Real Estate: UAE real estate market has now hit bottom - analysts
SHARE PRICE CHECK
RELATED STORIES
Dubai Rental Index
3 stories- Dubai rents to keep falling in Q3 - Landmark
23 Jun '09 | News - RERA plans rental index for schools
9 Jun '09 | News - Next RERA rental index update planned for Sept
13 May '09 | News
Real Estate Regulatory Authority
| 31 stories- Poll finds over 46% against RERA house price index
13 Oct '09 | News - RERA announces house price index plan for 2010
6 Oct '09 | News - Dubai's RERA plans open days to meet with customers
16 Jun '09 | News
Mobile
