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Landlords lose their grip
by This email address is being protected from spam bots, you need Javascript enabled to view it on Tuesday, 11 November 2008
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Results 1 to 6 of 6
Posted on Thursday, 13 November 2008
Landlords will get fair value
Posted by DG at 13:28 UAE time
The environment is actually gearing for a further advantage for landlords as fewer people are going to buy properties. The super rich couldn't care less about renting their places as they use them a few weeks a year and keep them locked for capital preservation and appreciation. Yes - there will be more apartments and a smaller number of villas available for rent , but there will be a queue of people twice as large to rent them. Landlords will get fair value and perhaps not see an environment of obscene escalations. The rents are not however going to slide down unless the economy fails and there are no people in the queue. Dubai remains and will be the most livable city in the Middle East and the queue of people wanting to rent is unlikely to dwindle. It would be wishful thinking to see the rentals go down - the landords are servicing huge loans at obscene rates of interest and the rentals are reflective of the finance outflows. Grab the nice villa or apartment when you get it, especially when the competition bidding for it is low.
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Posted on Wednesday, 12 November 2008
Lot of Land lords have to just think again
Posted by Kroner Derek at 12:47 UAE time
I work in a reals estate business, I was working in this sector even before the boom and the crash came. I still have the job however, there are few I know in my sector who have already jumped country after loosing jobs and mounting bank and credit card debts. Banks, are going to see a lot of jumpers because none of them are going to pay the money's back. In the real estate jobs are lost in an average of 100 a day UAE wide, and counting. These are the people who were staying in homes in Dubai and even in RAK because they got better home and land for the same money as Dubai and as they were in sales the physical location did not matter. I know few people who own boats and have left the boats are just lying there, I know this because I am seeing this. On the other hand my Landlord who told me to vacate the place because I was asking for retention of the rent came back to me when few days are left for the contract to renew my contract and to my surprise even at a lower price. However, I found a gentleman who gave me a place for much lower price also accepted 4 checks and I had already moved part of my belongings.
What I intent to say is markets, will fall and markets' will rise but there will be always good people who will stay the same and they earn consistently and get good people. The present place I am moving have very good community people and are unlike flash in the pan money makers who came and have gone. Dubai is great it survives all this and allows people to survive too., you just need to be patient.
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I wouldn't even consider paying yearly up front
Posted by Cutter at 11:39 UAE time
I don't understand how 1 year payment up front is the norm in the UAE??? In Qatar most rentals contracts are same as in the west: yearly contract with rent paid monthly.
The few people I do know here that have paid 1 or 2 years up front have been burned by this practice. Agents collected the money, fed the money to another agent, then another agent didn't feed the money to the owner, then the owner 6 months later assigns an evistion notice to the tentants. And the original agent is long gone. Who knows, maybe the owner is in on the scam also..probably is actually.
So here in Qatar, I wouldn't even consider signing anything other than a contract with post dated cheques.
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Rent Advance
Posted by GB at 10:09 UAE time
In todays economic climate, with more and more companies opting not to pay for accomodation, the onus has been for tenants to borrow off banks to get the necessary funds for rents.
In light of the decision by a particular bank to refuse loans to those earning under 10,000 Dhs per month it will mean that there will be a huge fiscal crisis for the mainstay of employees in the country - the blue collar workers. How are people whose monthly salary is usually below 5000 Dhs going to get advances from companies who are hit by the current global crisis? It will have a spiral effect, and workers will simply go to other countries to work.
Rents should be paid monthly - it gives the leasee a better chance to budget, eliminates the necessity to go into debt, and is better for all concerned from the leasees viewpoint. Where else in the world do you have to pay 1 year in advance? Maximum 1 month in advance.
The only "losers" here are the property owners, and they never lose. When the same properties that were being rented 10 years ago at 21,000 Dhs per year are currently being rented at 120,000 dhs per year I would say they are very much in front.
It is time for a little realism in view of the current world economic climate
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Posted on Tuesday, 11 November 2008
Rent in advance
Posted by The Consultant at 18:15 UAE time
You may be proved right, Rob, but then again maybe not. There was a property crash in Abu Dhabi in the late nineties (with my usual impeccable timing I had just left AD and moved up to Dubai, where rents were beginning their 10-year bull run). Many of my friends and ex-colleagues were able to find accomodation readily available and very reasonably priced compared to a year before. However, whilst the landlords had finally realised they had to drop their prices, they were still insisting on one cheque and would pass up the opportunity of a higher rental price in order to get it.
Whilst there will be pressure on landlords from residents who are unfortunate enough to work for companies like ITP who will not give them a salary advance to cover their rent, at the moment there are still hundreds of companies out there who will give an employee loan on production of a valid tenancy contract.
Unless a lot of companies decide to review their loan policy in the light of the current economic climate, my guess is that many landlords will still prefer one cheque and will be willing to hold out for a while to get it. From the landlord's point of view it's a no-brainer - the tenant is then in a position of weakness and cannot withhold rent for poor maintenance, and can be made to cover the costs of any vacant period if he wants to leave before the end of the tenancy.
On the other hand, the main difference this time around is there are a lot more private landlords with only one or two properties, who do not have the same financial clout as the big boys, so maybe you will be right and they will have to be more flexible.
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and some...
Posted by Paul at 15:48 UAE time
It is not just the flood of new property that will shift the balance. Construction and real estate is the biggest employer. Already real estate companies are shedding staff. Construction project cancellations will see many more people out of jobs. They won't be able to stay in Dubai for the sunshine without jobs - they will very soon be on their way home. Rents in such a situation will fall rapidly.
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