A new era has begun in the Dubai rental property market with a number of landlords offering monthly rent payments as bank lending tightens and the real estate market cools, Arabian Business can reveal.
From being a one-cheque culture just six months ago, the emirate's landlords are starting to offer 12 cheque payment schemes to tenants in a bid to fill accommodation.
With more properties coming onto the market as job losses mount and tenants downsizing amid the global crisis, landlords are increasingly showing more flexibility, keen to secure rental income, it has emerged.
Dubai broker Smith & Ken Real Estate is currently advertising a monthly payment deal for properties on its books in Old Town.
Antony Anderton, sales negotiator at Smith & Ken said: “Landlords are having to be more creative in the current climate.
“Especially with banks not willing to lend, a 12 cheque system is more appealing and it means people don’t have stump up a huge sum of money in advance. This will become more common in Dubai,” he added.
“More landlords are offering this, it’s happening very quickly, people are rapidly moving in this direction,” said Ryan Mahoney, managing director of agent Better Homes.
“Rents are coming down because demand has fallen and supply has risen through [job] layoffs and number of people releasing their units into the market.”
Landmark Properties is also offering 12 cheque deals on Discovery Gardens and the downtown Burj Dubai development.
Better Homes told Arabian Business it too is offering the deal on some its properties.
Rising supply is pushing rents down, which spiralled in the first half of last year before the six-year property boom started to correct.
Lack of bank lending has meant that many residents are unable to get financing to pay for a year’s rent in advance, so landlords are being forced to make payment easier.
Earlier in the month property consultant Asteco said in a report that rental growth slowed in the final quarter of last year.
Average annual rent for studios, and apartments with one, two and three bedrooms in Dubai were 80,000, 123,000, 165,000 and 243,000 dirhams respectively, Asteco reported
Anderton said that although there was growing evidence of landlords relaxing payment plans, they were still offering a discount to tenants who could pay a year’s rent upfront.
“Landlord’s are trying to avoid it as they feel it will change the market. But monthly payments will bring Dubai in line with any other developed property market, such as the UK,” he said.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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