Dubai rental costs fall by a third in two months - agents - Real Estate

Tuesday, 3 February 2009 6:51 AM

The cost of renting in Dubai has fallen by up to a third in the last eight weeks, agents said on Tuesday, as homeowners flood the leasing market amid a lack of buyer demand.

Research by Arabian Business has revealed that following Dubai’s six year property boom, rents for villas and apartments have plunged up to 33 percent in some of the city’s most prestigious locations including downtown Burj Dubai and the Palm Jumeirah.

Nehad Abdelhamit, leasing consultant for broker Dubai Waterfront Properties said annual rents for two-bedroom villas in the Springs had slid from AED220,000 to AED150,000 in the last two months - a 32 percent drop.

On man-made island the Palm Jumeirah, Abdelhamit said some of the biggest seven-bedroom 'signature' villas were 33 percent cheaper to rent now, with prices falling from AED1m to AED670,000 over the last couple of months.

“Most of the properties are not selling, so they are renting them instead to secure an income. People have got mortgages to pay,” she said.

Louise Pitt, director of leasing at broker Landmark Properties also said two-bedroom villas in the Springs have come down from AED 190,000 a year to around AED 135,000 a year in just six weeks, with the same sized properties in the Meadows seeing similar falls.

Rents are now falling in Dubai due to lower demand and increased supply as appetite for real estate in the Gulf’s tourist and business hub has suffered due to the global crisis.

There is growing evidence that apartments are becoming cheaper to rent as well.

Farida Khan, a leasing consultant also at Dubai Waterfront Properties said two-bedroom apartments at developer Emaar’s flagship Burj Dubai project had tumbled in price from AED250,000 to AED170,000.

“There is so much stock available and much less demand,” she said.

In a report published on Tuesday US bank Morgan Stanley said rents in Dubai were down seven percent in December from a peak last summer, while the cost of renting villas had declined 10 percent.

Last month property services firm Asteco said rents in Dubai and Abu Dhabi were flat in the final quarter of 2008.

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Posted by: DeltaSly Tuesday, 24 February 2009 2:38 PM[UAE] - United Arab Emirates

An old compound in Jebel Ali by the churches. Nice but old. Three existing tenants paying 103k, 108k and 145k respectively. Villa opens up - asking rent Feb 2009? 280k !!!!! No bargaining, no budging. Rents falling? Yeah right...

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Posted by: Shiva Krishna Durga Saturday, 21 February 2009 11:22 PM[UAE] - UK

Just to comment on Victoria Sinclaire notes, Indian did not built Dubai, Dubai was built and still being built by UAE national and international business enterprises. Dubai is sourcing man power from all over the world and it is a pure mutual business. Do you want me to use your argument and say the money of the GCC which built India?

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Posted by: Praising Good Landlords Friday, 20 February 2009 1:30 PM[UAE] - United Arab Emirates

My sister's landlord has decreased her rent by 7%. There are some real nice landlords. And their 3 bedroom now only costs 54K in warqa while rera states in their index as 150K. Its owned by a very religious person and he conducts business Islamic way. The building is kept neat and clean every day twice, mornign and eve, quick maintenance on call, 3 shifts of security in front and back of the building. There are good landlords, the rest just needs to learn from them.

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Posted by: justme Thursday, 19 February 2009 6:25 PM[UAE] - UAE

I would agree with property guru. Most of the people are cribbing about the way things are in dubai. Nobody sees the oppurtunity Dubai had given to so many people and iam sure millions of people made amazing amount of money in dubai. The current recession is not just effecting Dubai but the rest of the world and the only way to get out of the recession is to be positive and stop cribbing for just about everything. every dark cloud has a silver lining. its an old saying but make sense. Get positive guys, we can turn around this recession and munch the crunch.

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Posted by: Beaten man Tuesday, 17 February 2009 12:54 PM[UAE] - UAE

Well, my landlord has devised another way of earning and that is thru the car parking spaces, I received a letter yesterday evening that since we have less car parking spapces (Amen to that) he would be giving the car part to the highest bidded and the bid starts from 5,00 AED (my god) what a unique way of getting money. I want to ask the authorities one question If its a law that there cannot be an increase upto a certain percentage (whatever is the workout) why is it that there are no fines and sentences for landlord that break the law, isint that a crime?

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