By Ed Attwood
Consultancy says emirate is attracting residents from rest of UAE.
Residents moving to Dubai from locations such as Abu Dhabi and Sharjah are the most likely reason for a 7.6 percent rise in the emirate’s population last year, an expert from real estate consultancy Jones Lang LaSalle (JLL) has claimed.
“The major driver for this ‘Dubai Effect’ has been the reduction in residential rentals, which has resulted in Dubai becoming more competitive and therefore attractive for those working in the UAE,” JLL’s regional head of research Craig Plumb told Arabian Business on Tuesday.
“The other component of the ‘Dubai Effect’ is an increase in the number of households, as falling residential rentals are reducing the need for several households to share the same unit. The total demand for residential units is therefore increasing more rapidly than the overall population of Dubai.”
The JLL executive added that while the increase in demand was certainly good news for landlords, it was important to recognise that it is very dependent upon the level of rentals, with increased demand being driven largely by falling rental prices.
While Plumb welcomed the population growth data published by the Dubai Statistics Center on Monday, he called for a more detailed breakdown of the figures – such as information differentiating between locals and expats – which would allow for a greater level of analysis.
Jones Lang LaSalle has said it expects rentals to stabilise in some projects and locations in 2010, but that the overall level of residential rentals will decline further in 2010.
"good news for landlords".. not really.. rent price in my area is on a down slope.. from 100K down to 47K
Rents in our area - AL GHUSAIS - is on the increase. Our rents are increased again by 10% this year, based on RERA stats.
More Tolet boards hanging out of each buildings. But rents are non-negotiable. RERA's statistics is higher rents. 2 bed at OudMehta costing 120k as per DIRE. Rentals are still higher. I was paying Dhs. 32,000/- per annum for 2BHK split ac at OPC area in 2005 but now it is 75,000/-. Landlords are waiting and real estate agents taking risk to encash. We have to question ourselves, are the rents really reduced??? A billion dollar mystery. Mr. Venkatraman's concern is evident.
The average Dubai rentals for the 2BHK Residential Flat will fall to a flat 1000 dirhams/month in 2010 and to 8000 Dirhams/month in 2011
..... it is generally accepted that alot of expatriate owned properties will be coming on line in the next couple of years (not including those which are disputed, construction halted etc..) . There will be an oversupply of properties in the near future resulting in lower rents. I can imagine that there will be expat landlords who will be willing to lower rents to attract tenants at least to cover their maintenance charges and maybe some portion of their mortgage instalments rather than insisting on a certain level of rent. I know I would lower the rent for my property rather than leave it empty. The only thing that could prop up rents is is if people started moving back to Dubai from the other Emirates (which is happening) as Dubai does offer alot more. It will take time but people will have to vote with their feet. I do worry what will happen if local owned properties start emptying out in favour of expatriate owned properties. Could it lead to new law that expats can only live in their properties and not rent them out????
Last week JLL announced their findings in the retail real estate sector, this week in the residential sector in Dubai .I wonder whats in store for next week, hotel revpar drops on lower tourist numbers , oversupply in commercial sector causes rental rates to drop , rain makes you wet ?