Dubai landlords are offering discounts on deposits, rent-free months and added extras in a bid to defeat the summer lull that has sent tenancy enquiries into decline, industry experts said.
Owners had turned to flexible payments, up to 30 percent price cuts on units and deposit-free tenancies, indicating landlords will take a hit on revenues in an effort to fill their properties, said Renan Bourdeau, managing director of real estate portal propertyfinder.ae.
“July is a very quiet month as people who are leaving the country tend to do so at the end of the school year,” he said. “Also, it’s the holiday period so not only are tenants looking to move away on vacation, so are landlords and agents.”
For tenants with upcoming lease renewals, it may be a good time to press for rent reductions or renovations, he said.
“Renters may find that they have more negotiating power. There are more 12 cheque offers around and landlords of older properties in areas such as Jumeirah and Umm Suquiem may be willing to renovate or upgrade their properties.”
Rents across Dubai have plummeted since the onset of the global financial crisis while a flood of new supply has left an estimated 40 percent of buildings empty.
Nakheel, the developer of Dubai’s Discovery Gardens and International City, said in May it would give tenants up to two months rent-free in units in lower-priced developments.
Arabian Business this week reported that rents at International City had slipped below AED15,000 a year for the first time.
Mohammed, a landlord with properties in Dubai Marina, said said he had rooms standing empty as the majority of target tenants were out of the country.
“It is very difficult to rent rooms in the summer because everybody is on vacation. I have 16 rooms, four of them are empty at the moment. In January and all through the winter all the rooms were occupied,” he said.
“I have put the prices down to try and get people in. I haven’t done any special deals because I already offer monthly payments, but I will sometimes let rooms go without a deposit.”
Jesse Downs, director at Jones Lang LaSalle MENA, said tenants looking to upgrade would use the quiet summer months to hunt for bargains.
“Tenants considering intra-emirate relocation are value driven, often have specific preferences and are willing to wait for the right deal,” she said.
“As more supply trickles into the market, there is more competition among landlords… this leads to better negotiation positions and often lower rents for tenants.”
A survey by Reuters this week found industry analysts expect Dubai house prices to slide a further 10 percent, squeezed by nearly a third too much supply.
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