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Property expert predicts up to 25% drop in rents
by This email address is being protected from spam bots, you need Javascript enabled to view it on Thursday, 19 February 2009
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Posted on Sunday, 22 February 2009
Eh?
Posted by dave at 14:31 UAE time
Is this 25% drop in addition to the 50% that has already taken place? I hope so...
Shame he wasn't able to elaborate on what his 'property management' intiatives would consist of? Up in Discovery Gardens - they just leave the doors open- job done. Not sure if there's much money in that though.
As for Maggie; I don't believe anyone in Dubai expects to rent a place for 'practically nothing' and you may struggle to find neutral sympathisers over claims of being 'victimised'. However you do mention some interesting points about the rental structure differing from other countries and I would like to add a point that you have neglected to mention: In most countries - it is the landlords pay the agency fees. It's very odd that the customer gets lumped with the bill in the UAE. I think this should definately be taken on by the landlords.
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no need for middle/lower income property now
Posted by paul at 13:09 UAE time
During the boom there was most certainly a misallocation of resources. There should have been a focus on building a sustainable mix of property; let's say 10% luxury villas, 20% luxury apartments and the rest more basic apartments and dorm accomodation. This is what the population demographic needed. Instead every single developer piled in building 'luxury' property because that is what the investors/speculators would buy.
But since the market turned, building more 'low cost' accommodation is unnecessary. There is a huge surplus of property already - although at the 'high end'. So what will happen is that much of the property intended to be at the high end will end up where the demand is - lower and middle income workers.
In 2-3 years, it will all balance out. Rents and prices will fall heavily across the board. The Marina, JLT, Greens and other high density areas will end up as low end low cost accommodation for service sector staff.
There will be a balance reached in Dubai, but because of the overhang of high end property, the path of least resistance will be conversion of high end existing property down market.
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Rents going down
Posted by J Thomas at 09:18 UAE time
Maggie, I agree partially with what you said, but greedy Land Lords trying to charge rents as high or higher then New York, Zurich, Paris etc. is unrealistic, this is the middle of the desert at the end of the day, furthermore "all" the so called amenities at these buildings, most of the time are non-existant or not functional, surely you know that. Aside from that you live in constant construction noise and dust. So Land Lords wake up and smell the dust, charge a fair rent where you make your money but do not gouge people, greed is a bad thing and will bring you down... it is doing that already... This is the desert not a mega metropolis with all infrastructure needed available, maybe in 15 years, but not now, and if you and Lords continue behaving the way you did, you will never see high rents again. Good luck to you all.
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Posted on Saturday, 21 February 2009
More middle or lower-end accommodation in future projects
Posted by Sabu at 20:53 UAE time
The suggestion by the author for "More middle or lower-end accommodation in future projects" is definitely welcome.
It dosnt make any sense when all these high end building are empty and middle class people are running around to find accomodation.
There is a huge demand for middle class accomodation, and if there had been enough residences of this category build in dubai , things wouldnt look this bad for the developers. I guess they forgot that you shouldnt put all the eggs in the same basket.
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Rents Going Down
Posted by Maggie at 11:17 UAE time
I am a tenant as well as a small studio owner and although I do welcome the lowering of the high rents I do not understand how tenants expect to rent a place for practically nothing and do not take into consideration their own responsibilities as tenants in the maintenance of the the rented property. In other countries where the property sector is stable the tenants have to pay for maintenance fees to the municipality as they are the ones who enjoy the facilities and not the owner. What is happening now in Dubai is just turning the tables around and victimise owners who have taken loans to buy a place so that the thousands of workers in Dubai have a place to stay! It is a matter of demand and supply of course, however if we want to be fair from now on, with such low rents the tenants should be paying the municipality or other body maintenance fees. Especially now that RERA will be regulating this issue.
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