By Andy Sambidge
RERA's rental index shows declines on March 2010; Int'l City rents now start at AED15,000
Rents in some of Dubai's most popular areas have fallen by about 30 percent in the past year, according to the latest data published by the emirate's property regulator.
Apartment rents in Dubai Marina, Palm Jumeirah, Discovery Gardens, and Jumeirah Beach Residences have all seen significant declines, according to the Real Estate Regulatory Agency.
Prices for a one-bed apartment in Discovery Gardens, which houses about 41,000 mainly expats, currently stand at AED40,000-50,000 in the latest index, compared to AED55,000-65,000 a year earlier, more than a 30 percent drop for the minimum value.
The Rental Index is designed to give landlords and tenants in the emirate a guideline to pricing rents when negotiating contracts. The index is presented in the form of an online rent calculator on RERA's website.
Dubai Marina, which is consistently voted the most popular for would-be buyers and tenants, also saw big rent declines.
Rents for a studio in the Marina start at AED35,000, down AED10,000 compared to the March 2010 index, while minimum rents for a one-bed have fallen more than 30 percent to AED45,000.
Apartments on Palm Jumeirah have also witnessed a significant drop, with minimum rents of AED60,000 quoted, compared to AED90,000 in March last year.
Two-bed minimum values on the man-made island have also dropped by AED40,000 to AED90,000, RERA said in its online guide which takes the form of a rent calculator.
Twenty percent-plus declines were also seen in The Greens where the top price for a two-bed has fallen from AED130,000 to AED90,000.
Rents also dropped in Jumeirah Beach Residence (AED5,000 decline on one-beds) and in Jumeirah Lake Towers where minimum costs of a studio fell by AED12,000 to AED28,000.
Studio apartments in International City were among the lowest rental values, according to the RERA guide, starting at just AED15,000, down AED10,000 from March 2010.
Villa rents have also declined in the past year but some areas have witnessed a stabilisation in values, the RERA guide added.
Rents for a four-bed villa on Palm Jumeirah (at AED300,000-350,000) remained the same as in March 2010, as did values for a three-bed villa in The Meadows (AED170,000-210,000).
However, other areas of Dubai still saw declines with the minimum rent for a two-bed villa in The Springs down AED20,000 to AED70,000.
Minimum rents for a four-bed villa in Arabian Ranches now start at AED160,000, 25 percent lower than in March last year.
Despite the drop in property values, construction work continues apace across the emirate.
As many as 48,000 homes will be completed in the next two years, increasing current supply by 12 percent, Landmark Advisory estimates.
London-based real estate broker Cluttons predicts that 35,000 will be completed through 2012, prolonging the price slump for another 18 months.
Although rents have gone down, DEWA housing fee tax is nearly 3000/year. Etisalat gives compulsory elife package increasing annual TV and internet cost by 3600 and total 5400/year. Public service fees has increased, unofficial inflation has surged prices to 20-25% higher for all goods. Hence, mere rent-drop wont benefit the country and huge number of migrants will continue to leave the country as seen in the past 2 years.
I second your comment. You just said all what is in my mind.
That's right. Even though renting prices go down, cost of living is still high in Dubai due to food cost, community charges, hidden taxes and so on. No prices except rents are actually decreased, making Dubai still very expensive. Not to mention that the salaries also didn't go up in the past two years...
Agreed totaly with USA_Guy.
Rent corrections are of course welcome, but even with this the overall cost of living increases now mean it just isn't worth working in the emirates anymore financially.
Combine this with the lack of opportunity and legislated career limitations for expats, this is the last year in the UAE for a great many longer term western expats. Employers are trying to keep good people, but they are fighting a losing battle with the package they can offer versus the cost of living and educating a family in the UAE. The numbers simply don't add up anymore even with the rent corrections. No hard feelings though - It has been a pleasure to live and work in this part of the world. My family and I have benfited from the experience, and I hope the UAE has benefitted from expatriates experience in their workplaces. Mutualy beneficial in the past, just not anymore.
i think this is welcome however i strongly feel life in Dubai is great if you are a realistic person ie your spending, lifestyle are commensurate with your earnings.i am keen to be in the Gulf for many years to come.enjoy the Petro dollars people!
I fully agree to above, it's indirect taxing which makes it difficult for expats. However, the employers had and are having the cake with avoiding Medical insurance in the package, which leaves the employees risked at high medical fees.
I am sorry but i still do not agree with both " USA_GUY" and "7 year UK expat " , with all the increase in prices and the inflation , i am still better off than paying 35 % taxes , APR is coming and the IRS will still ask me to pay some thing since i make over the maximum 70 K USD , also the life style can not be compared i can never afford a maid back home in Chicago or driving a V8 car , so all in all i look at the full package and it is definitely worth it since i look at the full package.
As a British Expat living here in UAE for 3 years, I would agree that Accomodation Prices (rental or Purchase) and School fees are higher than UK, but everything else is in line with most places in the world. Food prices are up all over the world. Job market in UK is not that good either, just like here.
Only way I will Purchase a property in UAE if I was to get permanent stay in UAE, other wise why should i pay all that money knowing that this does not Guarantee Residency in UAE. In my opinion, to stimulate the market, rules regarding ownership of the property should be changed. At least for western expats, their credit rating from their home contury should be used to determine lending to them and as long as property is owned by that expat, they and their family should be able to stay and work in UAE.
Giving nationality to expats with certain skills sets, that would contribute to sustainable developement of the economy and the nation in the long term.
Mr. 7 year UK expat, I agree the costs keep escalating in the UAE. We are looking at nursery schools for my toddler. The prospect of paying 18,000 to 22,000 AED a year to play with balls, sing songs and such just makes my head spin, but then I think "Where would we go?". I always recommend families create pros and cons list for Dubai and for other destinations. My wife and I keep our lists separate and compare then from time to time. The pros of Dubai still outweigh the cons.
Mr. 7 year UK expat, where are you going to go? We are currently in the UK visiting my wife's family and I cannot imagine living here. Petrol is now 1.30 Pounds per litre. Food is less expensive in grocery stores than say Spinneys but with bad weather, increasing costs, high taxes, bad public schools, why would anyone live here if they have a choice?
Dubai offers the best quality of life in the Gulf for an expat family so before anyone things the grass is greener elsewhere, do your research before making a move.
as it seems everyone one has cottoned on to the ever increasing fee's/costs associated with living in the UAE, lets not forget the overnight 100% increase in the parking fee's (i know its only AED1 extra but never the less it still doubles the turnover for the RTA)
and what about the 75% increase in fuel prices in the last 24 month?
the current talk of Salik being increased and new gates opening on Al Kahail and Emirates rd!
people seem to believe that the uae is a tax free country, lets not beat around the bush, its not. Income tax maybe.
ok, rant over.
i still enjoy living in the UAE, and even though there are issues that need to be addressed here, show me a country or city which doesn't have its own problems.