By Alex Delmar-Morgan
Rents for villas and apartments drop up to 33% in some of city's most prestigious areas.
The cost of renting in Dubai has fallen by up to a third in the last eight weeks, agents said on Tuesday, as homeowners flood the leasing market amid a lack of buyer demand.
Research by Arabian Business has revealed that following Dubai’s six year property boom, rents for villas and apartments have plunged up to 33 percent in some of the city’s most prestigious locations including downtown Burj Dubai and the Palm Jumeirah.
Nehad Abdelhamit, leasing consultant for broker Dubai Waterfront Properties said annual rents for two-bedroom villas in the Springs had slid from AED220,000 to AED150,000 in the last two months - a 32 percent drop.
On man-made island the Palm Jumeirah, Abdelhamit said some of the biggest seven-bedroom 'signature' villas were 33 percent cheaper to rent now, with prices falling from AED1m to AED670,000 over the last couple of months.
“Most of the properties are not selling, so they are renting them instead to secure an income. People have got mortgages to pay,” she said.
Louise Pitt, director of leasing at broker Landmark Properties also said two-bedroom villas in the Springs have come down from AED 190,000 a year to around AED 135,000 a year in just six weeks, with the same sized properties in the Meadows seeing similar falls.
Rents are now falling in Dubai due to lower demand and increased supply as appetite for real estate in the Gulf’s tourist and business hub has suffered due to the global crisis.
There is growing evidence that apartments are becoming cheaper to rent as well.
Farida Khan, a leasing consultant also at Dubai Waterfront Properties said two-bedroom apartments at developer Emaar’s flagship Burj Dubai project had tumbled in price from AED250,000 to AED170,000.
“There is so much stock available and much less demand,” she said.
In a report published on Tuesday US bank Morgan Stanley said rents in Dubai were down seven percent in December from a peak last summer, while the cost of renting villas had declined 10 percent.
Last month property services firm Asteco said rents in Dubai and Abu Dhabi were flat in the final quarter of 2008.
Finally some credible figures from people whose very existance depends on rentals since the sales have vanished. One wonders how the Morgan boys feel on reading this kind of reality, when clearly they haven't been doing proper homework, or are deliberately being obtuse.
Monthly rents are the norm in the rest of the world and it's about time Dubai followed suit, especially with the ridiculously high rents that were and are, still being charged. Who, apart from Companies can afford a whole year's rent upfront without having to borrow? It took the global financial crisis to bring Dubai to it's senses.... About time, better late than never... Let's hope the trend continues.
this is still a joke, and the Dubai remains they only money hungry country in the world that does this. sure sure the rent down. those prices are that cheap at one cheque! while increasing the number of cheques up goes the rent. there isnt rental index, its still the same game of fraud. Dont play with the media, its already controlled and seriously you have got to stupid if you believe anything that you read, in realty its all a trick.
Where do get your news from? My landlord has just increased the rent for me, another AED 10k, I hope the boss will allow me to freelance now.
Wait guys wait. What we see now is just the tip of the iceberg. This is simply the first cut from the rediculous high prices peaking end of 2008. Now more and more people are leaving emptying their flats. Now more and more units getting finished and flooding the market. I predict the prices going down UNDER construction prices leaving all speculators and greedy developers with empty pockets. And of course the rents will be effected too with a delay of about 6 month. Just wait and see the iceberg melt...
The news that rents are now becoming more realistic is a joke as compared to any other developed market in the world the rents are still sky high. It is cheaper (at times) to get an apartment in Manhattan, than in Dubai (considering that most of the view is always construction). Yes, the market rates are going down and for Dubai standards this seems less, but when compared to the rest of the world we live in, we have much more to stabilise until the tenants can pay similar rents to other nations. The notion of no income tax being a huge bonus has been pretty much not applicable in the past 5 years (approximately), considering rental has been costing some individuals more than 50% of their monthly salary. However, kudos to the market for coming to terms with the 12 cheque norm, as that is certainly a good sign and hope it sticks on.
ON SEEING THE ARTICLE WE HAD RENEWED OUR RENTAL LICENSE AND WERE AGAIN SENT A NOTICE TO INCREASE IT FURTHER BY MORE THAN 35 % WHY SO MUCH INJUSTICE IN BUR DUBAI ????
If anyone thinks that the reductions are permanent, then they are the people who dont believe in the story of Dubai. Rents will stabilise to realistic levels once there is buyer confidence , and the government can do many things to make this happen - like issuing homeowners 6month or 1 year visas gratis to bring them back to Dubai and increase the consumption and human belief that is so critical to its continued success on the world map. It is not buildings and icons that create the magic of Dubai, it is instilling each homeowner as a marketing representative to the world at large.
hi. my shop rent is 21k.landlord has given new contract which says 40k rent. is it really a freeze..do you think its going to help me..he says if you go to complain i will kick you out..what an idea sir.
Good if it has; what the industry really needed was a reality check, raher than a greed filled desire. ON the other hand, does it make sense to potray decreases on units like a 2 bed room appt. from 250,000 to 170,000 and benchmark the entire industry movement???? I personally do not think so. Get down to the real thing......