By Andy Sambidge
Updated guide published by property regulator shows rents down by up to 20% since March.
Rents in some of Dubai's most popular areas have fallen by about 20 percent since March, according to the latest Rental Index published by the emirate's property regulator.
Apartment rents in Dubai Marina, Palm Jumeirah, Discovery Gardens, Downtown Burj Khalifa have all seen declines, according to the Real Estate Regulatory Agency.
Prices for a one-bed apartment in Discovery Gardens, which houses about 41,000 mainly expats, fell to AED45,000-55,000 in the latest index, compared to AED55,000-65,000, an 18 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.
Dubai Marina, which is consistently voted the most popular for would-be buyers and tenants by propertyfinder.com, also saw rent falls.
Rents for a studio in the Marina start at AED40,000, down AED5,000 compared to the March index, while minimum rents for a one-bed have fallen more than 20 percent to AED55,000.
Apartments on Palm Jumeirah have also witnessed a decline since Q2, with minimum rents of AED75,000 quoted, compared to AED90,000 in March.
Two-bed minimum values on the man-made island have also dropped by AED20,000 to AED110,000, 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 AED100,000.
Studio apartments in International City were among the lowest rental values, according to the RERA guide, starting at just AED20,000, down AED5,000 from March.
Villa rents have also declined since March 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, 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 AED15,000 to AED75,000.
The largest drop was seen for a four-bed villa in Umm Suqeim where minimum values slumped AED90,000 to AED160,000, a fall of more than a third.For all the latest UAE 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.
these rates are still several months behind the curve, or deliberately high. in The Greens you can now get 1 bed for 45k and two bed for 75k and still falling. any landlord who tries to use this as a benchmark to set rents will find their property empty for some time
These prices will continue falling until they reach their "proper" value. They're still considerably high to this minute which is why there are still a lot of empty properties to this date.
Giles is right about Greens prices, rents are now nearly 20% lower than when I first moved in 2005. I think it's not just about the Dubai economy for places like the Greens. They are becoming less desirable places to live. I can realistically see the place becoming slum accommodation within 3 years. The place is shabby now, all the pool coolers 'break' in unison at the same time every summer (this year is third year in a row). They always fix them right around the end of September when they're no longer needed. Half the gym machines are out of action and never get fixed promptly like before. And there seems to be a lot more noisy neighbours and noisy pets, not to mention overcrowding with large families in 1 bed apartments which if it continues is going to lead to more problems. Emaar is naming and shaming owners who don't pay the service charge, but I would like to name and shame Emaar for the appalling level of service they provide, the poor maintenance and the apparent toothless enforcement of the community rules. I've personally had enough and am moving out next week to a new building in the marina.
We all wanted it,, now its a reality.... I just renewed a one bed in old town for 70K, landlord was desprate not to lose me. Now half off the 2007 peak.. Guess what, prices will be lower next year as well.
Wonderful news .... rents now in a downward trend, finally recognised by RERA, albeit their index is well behind the actuality on the ground and no 'real' bottom is yet in sight. Now the bargaining begins ... watch JLT drop like a rock. I can see guzumping being the order of the day with rentals, as landlords start to realise that the tenant is indeed the master, and can dictate the true terms and conditions - fairly and justly as tey should have always been, as it is around the world. Plenty to chose from, realistic payment terms and proper tenant-landlord relations able to be cultivated, if the landlords wake up, before it is too late, slap the "To Let" signs on their buildings and negotiate DIRECT and cut out the snakes, low lifes and greedy agents that play (prey) on the market, acting as glorified middle-persons and who over-see the rates and try and conceal the real facts. Personally, my family and I moved into new TECOM area, with a fully / daily serviced Apt, great gym (new and maintained), chilled pool/ few users and no breakdowns (yet, over summer!) and excellent & friendly staff with ease of location, amenities nearby with MOE, Lulu, Dubai Marina etc. and all for less than AED 75k.... no DEWA bills, no chilled water bills, no satellite charges, no security deposits, and all within the AED 75k.... payable by credit card in FN intervals.... value is now coming into the market and I suspect more drops to come as the September period rolls on and very few families return.... a true supply-demand curve to watch now. I shall not be surpised to see RENTAL INCENTIVES start to be offered - few months free, lesser security deposits, multiple chqs etc. and try to entice customers this way. If the empty buildings remain empty for much longer, the asset will deteriorate at a faster pace than if 'used and consumed' by inhabitants. More head aches for the owners in the days to come. Happy days ahead .. for those staying. For now - our plan is to still exit Dubai, as whilst acommodation is on the way down (finally....), the marketplace is still silly and absurd in terms of costs of living... just had Aussie friends here and first thing they said - 'why would we shop here, even though the dollar is as high as it has almost ever been? .... the prices are unrealistic, over-inflated, service and quality is not that good and I have to ship it all with me home ... I can buy at home, in my own comfort, exchange if not right, it is cheaper and newer models and styles are available!!!!!!!!!' Hmmmm.... what next for Dubai?
Until the UAE population can increase to absorb the new and oversupply of residential and commercial property, prices and rents will most probably continue to fall. One solution could be for the UAE governemnt to offer incentives for people to buy and live in the UAE, such as bringing in a 3 year residence visa for legitimate buyers of property. I noticed Cyprus is now offerring a 3 year residence visa for property purchases, and seems to be paying off with their property market very strong.
not even for comments. I remember 6, 12, 18 months ago, when ANYTHING was written about the RERA index, there was an instant reaction by readers, comments were posted by the dozens on the same day. Today I viewed this article, just so I could read your comments. I found a measly 6! are there less of you here ;) Or is it that readers dont take the RERA index seriously? i think the latter, as it never, ever made any economic sense. as one of you said, their numbers were always deliberately high, and it always seems like a slipshod attempt to slap numbers to neighborhood/area where no 'on the ground' research or fieldwork took place. I think any index that assigns values rather than surveys actual values will always be useless and counter intuitive. prices will eventually accommodate buyers (renters). its a natural process that will take effect instantly in an oversupply/weak demand situation. Some of you will argue that its not exactly a free market economy. Well fine, it will just lag, 3,6, 9 months, etc. When crap hit the fan back late 08 early 09, these blogs all talked about when are the rents going to fall? and many expected rents to come off by 50% immediately! that cant happen, as we don't consume homes like we do fuel or bread. BUT, rents have been falling, slowly and surely ever since, and personally, i think unless there is an influx into dubai, to the tune of 0.5-1 million people (another goldrush, but unlikely), then rents wont turn around or even stabilize for some time to come. My contract is up early Sep. in a mirdif villa. owner quoted our renewal price which was exactly 31.8% lower. we (wife/2 kids) are leaving dubai late august and going home, it doesn't make economic sense for us to stay anymore even with the rent decrease, as most of my income is based on bonuses (and those dried up fast!) and I pay housing/schooling (outrageous school fees, makes my blood boil!). don't get me wrong, we enjoyed it, I'm thankful, and the uae was good to me. id certainly come back in the future if the opportunity was there again, but for now we are not renewing, so here is another unit on the market!
I wondered how long it would be before someone brought up the issue of 3 year visas for property. Anyone who wants a 3 year UAE visa, can get themselves over to the RAK or Fujairah free zones where you can set up a company and get 1 or 2 work visas, and then sponsor your family - whole process takes a few weeks and costs a few thousand dollars. And then you're free to live in any Emirate. The whole belief that people would pay millions for Dubai property in order to get a residence visa was a myth peddled by the real estate industry to attract speculators from certain poorer countries where a UAE visa was highly prized. But as I showed above, there are MUCH cheaper routes if someone wants a visa, and these are available RIGHT NOW. If you're pinning your hopes on people parting with millions for Dubai properties on the basis of getting a visa they can already get for a few thousand dollars, then you're going to be disappointed.
Clearly you're a bunch of narrow-minded, poorly informed (with the exception of Dr Paul whom I respect - usually), self obsessed and bored individuals. Its no surprise to any of us that the UAE property market is in serious trouble. But to wish hardship on those poor people who are now unwilling landlords is just pathetic. Not all of them were speculators, not all of them are 'greedy' and not all of them are too different to most of the 'wingers' I read comments from on this site. Get a grip!! Many of the properties laying vacent or for less rent are being offered by people JUST LIKE YOU - ordinary people who fell into the UAE crazyness. I'm sick of greedy renters calling all landlords greedy. Most landlords (like me - an expat who has been stung by the WFC and UAE's meltdown) are suffering terribly. Not all are greedy. I am personally working only to pay back the interest on my propety - which I bought to live in (the interest payments, via a UAE bank are 8.5%) Despite that, I have just returned from my native country and can tell you all that the UAE is currently very affordable. So much so that I will remain here and wear the losses sustained on my villa on the PJ. Good luck to you all. I am so sick of reading these comments I will refrain from doing so again. They are very depressing.
You mean you're telling me that now it is the renters who are making your life miserable? Hasn't this recession taught you that the consumer is king? If I knew who you were Andrew I wouldn't buy any of your property as you still seem disillusioned by the fact that things will get better. Better lower the prices even further my dear, for you have to prepare for the worse. YES, the rents will continue to fall, and YES, you yourself will also find yourself in a position to lower your rents' prices, and YES, we're all right. All of you landlords took advantage of the situation in this country prior to the recession and sky-rocketed your rents' prices like crazy. Wake up and smell the recession!