Dubai rental prices to fall 30% - EFG Hermes - Real Estate

Tuesday, 10 March 2009 11:43 AM

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)

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Posted by: Rental Bubble to Burst Monday, 16 March 2009 2:50 PM[UAE]

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!

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Posted by: UK Tuesday, 10 March 2009 12:41 PM[UAE] - UAE

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.

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Posted by: Rainigade Tuesday, 10 March 2009 12:17 PM[UAE] - UAE

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!

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Dubai rental prices to fall 30% - EFG Hermes

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