With rental rates rising by an average of 24 percent in some of the most popular areas, Dubai landlords are increasingly looking for tenants to provide salary certificates to prove they can afford to cover the rent instalments, a senior real estate executive said.
“It is quite prevalent when renting properties that are government owned or managed,” said Zubin Firozi, head of property management at Better Homes, Dubai’s largest real estate agency.
“It is becoming more common now with other landlords when they doubt the prospective tenants affordability. Such requests are not welcomed by tenants as some see such request as being offensive; however it is understandable from the landlord’s perspective.
"It is important to know if the tenant renting the property can actually afford it and has no problem paying the rental instalments.”
A recent report by Better Homes found nearly 88 percent of those surveyed renting their home instead of buying.
The move by landlords to verify the credit worthiness of potential tenants comes as rental rates in Dubai rose by an average of 17 percent last year, with some of the most popular areas rising by nearly a quarter, according to research by real estate consultancy CBRE.
Dubai was one of the hardest hit real estate markets during the downturn, with CBRE reporting that average one, two and three bedroom apartments seeing rental rates slumping by 54 percent between Q4 2008 and Q4 2011.
“Dubai is seeing higher rental growth this year due to a sustained period of population growth, positive economic performance, increased occupier demand, and limited availability of quality units in the most desirable locations,” said Matthew Green, head of research and consultancy at CBRE Middle East.
This positive growth was also seen in the amount paid by new buyers, Green added. With around 14,000 sales registered by the Dubai Land Department in 2012, he said prices rose by an average of 13 percent, with the Greens and Downtown Dubai performing even stronger and surging ahead 20 percent year-on-year.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.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.