By Alex Delmar-Morgan
But some areas see rise as tenants take advantage of cheaper prices to upgrade to bigger homes.
Dubai rents continued to plunge in July on weaker demand and increased supply – but some areas saw rates rise as tenants upgraded to bigger properties, a new report found on Wednesday.
With relocations on the increase as rates become more affordable small pockets of Dubai saw ‘marginal rent growth’ such as three-bedroom villas in Arabian Ranches.
Meanwhile, rents were falling in other areas “considerably”, real estate consultant Landmark Advisory said in its July leasing guide.
Annual rents for two-bedroom villas in Arabian Ranches fell up to AED20,000 over the last month But rents for three-bedroom villas in the same area rose by AED10,000, with five-bedroom villas jumping as much as AED 50,000.
Price increases were also seen at high-quality build villas in prime locations such as Jumeirah Islands and the Greens - as people looked to upsize.
Jesse Downs, director of research at Landmark Advisory said rents fell at larger apartments as tenants moved out of shared accommodation into single properties or studios.
Studio apartments at Jumeirah Beach Residence (JBR) saw rents climb by AED10,000.
Rents and property prices have dived in Dubai since autumn last year amid a real estate collapse.
Downs said it was too “early to call a price floor” – a sign that rents are likely to drop further in the emirate. It has been reported that property prices could fall by another 20 percent this year.
Despite weakened demand from job losses and expatriates returning home, relocations from Abu Dhabi and Sharjah were holding up rents in some areas.
It's probably true there is a fair bit of relocation within Dubai by people who were previously forced to live in squaler by the ridiculously high rents; those on "use it or lose it" acommodation allowances from their employers; and those who couldn't negotiate reduced rents so they moved to similar standard at lower rate. However, can't believe that any sectors could have increased with the current huge oversupply
Is dubai only beyond sheikh zayed Road ??????????? Why is it that i always see articles of rental rates and articles on rental issues for areas beyond the first interchange . What about the entire old dubai where majority of the population live and work . I always see that the main city is not taken into consideration when when calculating the rates or when giving a article or statement to newspaper. , therefore according to me all these statements make only half sense , If they,the real estate consultants or the AB newspaper want to mention the term Dubai in this article then you must report on the rates of old dubai as well . (deira, Burdubai, Karama, guisais).
Whoopee. Rents have fallen again, thank you so much dear RERA property index. When the first rental index came out, friends residing in an eleven year-old building in the "luxurious" Bur Dubai area discovered that their rental index cap was 200,000 dirhams for their run-down, poorly maintained, three-bedroom flat. The Landlord noticed it too. As they were paying "only" 130,000 the Landlord seized the moment and raised their rent by 20,000 dirhams, well within the 20% cap which was, from his viewpoint, his entitlement. As their new lease was due, they had no choice but to pay the 20,000 dirhams increase - in a time where no bonus or salary increment was given by the employer. With school fees for two children, ever increasing. And school bus transportation cost higher than taxi fares for same journey. And so, they made plans to leave. The children are already back in the home country with the wife, he will leave when the lease expires. And no, he's not telling his Landlord or RERA.
With the present economic environment and the limited supply of quality 3 and 4 bed villas , theres only one thing to do - grab them while they are available to get a great rental rate at least for the first year.
The craziness of property market has eased. The recession has done 80% of the people so much good, although some have lost their jobs and businesses (hopefully they will get them back â€“ inshallah). But thatâ€™s part and parcel of life. Things here were messy, I was for instance lucky not to buy the property at the time of the boom or else I would have been in a swamp surrounded by all filthy lawsuits and things which my colleagues and friends are facing. Touch wood. The thought behind my property buying was why to pay 120k rent for 1bhk when I can buy it for 1.5 million and I can pay it over a period of 20 years or so and get some many back after the interest is paid at the end of my term and if and when I want to sell it off, I get something back after the sell. Today my thinking is why to buy and take a 20 years risk, when you can get a decent 1bhk apartment from anywhere between 25k to 60k ranging from dubai.sharjah, ajman etc. and I have the power to terminate my contract, not to fall in the hassles of maintenance frauds and not to worry if the house I bought works out well or not for me. To terminate a rental contract is easy for me and I am spoiled for choice. Even if I pay 50k a year for a 1bhk at the end of 20 years I pay only a million and I still save about half the million (if the property was 1.5) + all the interest that I do not pay and I still end up with loads of money. Because the property in this part of the world is going to depreciate as compared to other parts of the world. The house you buy is not yours, the land on which it is built is not yours, the laws for maintenance are not clear, what happens after 25 years if the building is being demolished?? Where are the owners going to go till the building is going to be reconstructed? What difference money do we pay after 25 years as a compensation for the developer to redevelop the land ?? all these nasty questions and things come in. I am not clear on it and I am sure 85% of the people are same as me. Risk is still high in buying unless you are a flipper and enjoy flipping property till you get an uninformed owner whom you can fool with all these things. We hope that the rents remain at this level or fall even further, so that more people fall in the â€œaffordableâ€ category and do not compromise their dreams and lifestyle they desired for, when they first came here. Dubai and UAE still has time to bring back peoples dreams and let them live it.
"Price increases were also seen at high-quality build villas in prime locations such as Jumeirah Islands and the Greens - as people looked to upsize." One only has to look around at all the empty apartments. If people are upgrading to the Greens there must be an awful lot of former Greens residents who've either upgraded to a villa, or gone home.
HEHEHE Good News.. Dubai has milked us enough!!
I'd like to correct a statement in one of your stories - its impossible to use in the term "high quality build villas" and the word "Dubai" in the same sentence. Its an oxymoron.
yes there sure is plenty of relocation, my building in the marina is now filled with indian workers (6 in the 1 bed next door) and ladies of the night replacing those nasty westerners who lost there jobs the minute things got tough (without the correct payoffs). the locals and there overpayed "highly skilled" government jobs are obviously happy with this situation judging by the amount of time they spend sitting around the pool with these new female rellocators. on another point i would love to know just how much the rents would acctually fall if free market conditions where allowed to run and the numerous empty flats not released onto the market were put up for rent (take a look at JBR and its empty towers!)