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Dubai rents rise as development stalls
Delays in Dubai property projects drove up the average rent for apartments by as much as 18% in the first quarter, real estate services firm Asteco said in a report.
The news comes despite the government-imposed 'rental cap' of 7%, and as concerns over the cost of living in the emirate grow.
Only 14,000 housing units came onto Dubai's market in 2006, 26,000 fewer than expected, according to an Asteco spokeswoman.
"The rent increases were mainly driven by a shortage of completed residential units," the spokeswoman said.
"However, since a large number of developments are expected to hit the market at the end of this year, the rents are expected to stabilise."
At the end of the first quarter the cost of renting a two-bedroom apartment rose 18% to 115,000 dirhams ($31,310) a year, compared with the year-earlier period, Asteco said.
Rents for one and three-bedroom apartments went up by 14% to 80,000 dirhams and 13% to 140,000 dirhams, respectively, it said.
Rents for villas rose 15%.
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Posted by T Crowe Semler, Riyadh, Saudi Arabia on 20 July 2007 at 12:00 UAE time
When the cost of living is too high...citizens, expatriates, and tourists will select another option...a more afordable choice to live, work, or visit. The UAE could possibly strip itself of all the wonderful benefits of new growth by pricing itself out-of-the-market...If you expect to provide service to the "super-rich" you might want to insure the "working-class" and "middle-class" can afford to live within the country or city. Greed or Fair Profit... People must be able to feel the sense of reaching goals and objects...not just living pay-check-to-paycheck...the working poor due to high rent / real estate costs...or extreamely low exploitive wages will eventually kill the prosperity and stifel the growth... Insha'Allah the UAE government will take the steps to insure a quality of life for ALL who live and work within the boards. I am, your brother, T Crowe O'Rourke Semler
Posted by Anas Arnaout, dubai, UAE on 17 July 2007 at 15:00 UAE time
Dubai govt should follow the Abu Dhabi govt in imposing the 7% on the unit itself not the tenant. this keeps control over the rent and stops greedy landlords from finding ways to evict tenants
Posted by puneet, dubai, UAE on 3 July 2007 at 15:00 UAE time
Despite absolute faith in Govt Authorities' Intent, I do not see dubai rents cooling due to the Rent-increase caps being declared last year in 2006... Market forces are unstoppable at the moment & consumers like me read " non-freeholdable expats ( no pun intended !!! ) " are at the receiving end of the spectrum. PUNEET(050-8689816)
Posted by John Flannigan, Doha, Qatar on 29 June 2007 at 20:00 UAE time
The same is happening in Qatar. The Emir issues a decree that rents should not rise more than 10%. Needless to say it was all window dressing, and nobody has payed any attention to it.
Posted by AK, Dubai, United Arab Emirates on 28 June 2007 at 13:00 UAE time
How is the government enforcing this rent cap? to me is the real question.