Finding a place to live in Dubai is, right now, a painful experience. It’s not quite as bad as it was in the middle of 2008, when the ‘agent’ to whom I had just handed over AED95,000 to cover a year’s rent in a studio in the Marina attempted to leave the country with my cash. But it’s still a long, drawn-out process that will have you occasionally clenching your fists with sheer frustration.
A couple of years ago, when I was last looking for a place to live, paying by four cheques (or more) was the norm. Nowadays, with the market back in the ascendancy, landlords seem to think that potential tenants are cheating them out of their livelihood by offering four cheques. I offered one landlord a premium of 5 percent, in a bid to cajole him down from three cheques to four; the response was a grunt before the phone went dead.
For the life of me, I cannot work out what the difference between three and four cheques is. I can see why single-cheque payments can work out for both the landlord and the tenant (if they can afford it); the tenant gets a slightly cheaper home, while the landlord receives a big lump sum that will earn far more in interest or through investment than a series of smaller payments would provide. But three cheques versus four? Beats me.
Another bugbear has been a tendency on the part of some landlords to insist on seeing a copy of my bank statements. When you have the ability to put a tenant in jail if one of their cheques is returned, precisely what added security does a faxed account statement provide?
But the good news, for those who are worried about a property bubble in Dubai, is that despite the huge reported increases in real estate values in the city last year, other pressures are ensuring that this isn’t wholly a landlord’s market just yet. Jones Lang LaSalle thinks that about 28,000 new units (an 8 percent increase on current residential stock) could enter the market between now and the end of the year.
From my own experience, this is evident from a wander I took down both sides of Sheikh Zayed Road and through the DIFC last weekend. Older towers are full to the brim, with a couple of exceptions here and there. But there are some colossal new buildings that are virtually empty, with landlords proving far more amenable to negotiated deals there. Further outside the city, a drive past Emaar’s Al Reem project next to Arabian Ranches — the first tranche of which was only launched last April — shows that villas are being topped out, with the exteriors already painted.
I’m also not entirely convinced about how the Expo win will affect Dubai’s property market in the short term. Despite anecdotal evidence that landlords have sought to raise prices on the back of the bid win last November, there doesn’t seem to have been that much of a bounce. After all, the event is still six years away, and a good percentage of those looking for somewhere to live in 2013 won’t even be living in the city in 2020.
Lastly, as I was sitting in a property broker’s office earlier last week, I overheard two agents complaining that prospective tenants were finally refusing to accept any higher prices, and wondering whether the market had reached its peak. While I don’t agree with that last assessment, I am hopeful that the excessive rises posted last year won’t be repeated in 2014, resulting in a much more mature and sustainable growth pattern.