By Andy Sambidge
UAE real estate watchdog's chief also predicts up to 50% fall in 2009 rents depending on location.
Dubai's real estate regulator has announced it is due to publish a new rental index in April in a bid to help tenants and landlords.
Officials from the Real Estate Regulatory Authority (RERA) say it is aimed at making the market more realistic and follows a huge protest over the rental values included in the original index published last month.
The index, which gives tenants and landlords in Dubai a guide to what rent levels should be throughout Dubai should be, was originally scheduled to be republished every six months.
Marwan Bin Galita, chief executive of RERA, has predicted that rents in the emirate could fall by as much as 50 percent this year, depending on location.
"The rents have already begun to come down. Depending on the locations, this could range from 10, 20 to up to 50 per cent by the end of the year," he said in comments published by UAE daily Gulf News on Thursday.
However, due to slowdown and delay, around 20 per cent of the 31,000-plus residential units may not come online this year.
There is also a 40 per cent decrease in the 43,880 units forecast to come online in 2010.
The value of Dubai real estate transactions so far this year has fallen 45 percent to $4bn in the first two months of 2008, the land department said on Wednesday.
The first rental index was released in January and caused anger among tenants who said the rental rates quoted in it were based on last year's rents, before the financial crisis hit, when rents were at their highest.
Here we go. Now the RERA forecasts and predictions are getting closer to reality. I hope the Index will recognize this.
It looks like RERA is trying to prevent the rentals from going down. The rental index was required when the rates were shooting up. But now, that the demand is continuously dropping, the retals will automatically come down. Whatever index RERA comes up in the next month, it will be obsolete by the time it is released. Thanks but no thanks RERA.
As long as RERA don't categorize the different residential units based on a certain criteria (i.e.: age of building, facilities provided, space, developer reputation, quality of finishes etc) on a 1 to 5 star system and then define a range of rents for each category depending on the area, the whole index shall be useless. In some areas like Deira, a 2 BR flat in a brand new building rent is more than a double of a 2BR flat in a 20 years old building, which can never be reflected in the index under the same 2BR category.
The Rent Index has given a tool to landlords to raise rents and sustain them. RERA released the index based on 6months old rents & the landlords of 20/25year old buildings with no facilities/maintainence are increasing rents on the basis of the Rental Index. RERA needs to release a realisitc index based on current rents/demand/supply & age/facilities offered by a property. RERA has to take the lead and guide the market to everbodys advantage
The greedy landlords of old bulidings have been increasing rents to reach the RERA index figures. Now RERA is going to revise this downwards. But what will happen now to those who renewed at those incresed rates with one or two cheques? Will RERA compensate? Rera should apply some common sense. If not Dubai will loose further.
I have perused the Rental Index and to me the prices are not realistic. They are in actual fact much higher than the current rental prices you see advertised. Rather than publish 'tosh' put laws in place to keep the rents realistic, rent payments to be done in 12 cheques, standard and fair agency fees, etc.
Dubai is just too expensive as an overall packaged place to live...example... Arabian Ranches (Bur Dubai 32km) - 3 bedroom semi detached unit 1800 sq. feet. with 120sq. ft garden - Rental AED 15,000 pm Things to do in Bur Dubai - One small museum, Sheikhs residence and Creek boat trip. Public Transport - Taxis Epsom (Central London 28km) - 4 bed detached unit 2650 sq. feet with 900 sq ft. garden. Rental AED 7000.00 pm Things to do in London - 16 world class museums and art galleries, theatres and opera, historical buildings by the truck load and Thames boat trips to see them. Public transport - Taxis, Trains and buses Similar properties to Epsom can be found close to Paris, New York, Berlin, Barcelona, Madrid, Lisbon, Brussels, Amsterdam, Milan, Rome...as they say...'its all relative'... Yes, there are plans for an opera house, museums and galleries, but it will be a huge task for Dubai (and Abu Dhabi) to match these cities in the short to medium term to justify these costs to live here. Yes, we can always move and many are...
I don't get how people can say that their landlord has increased rent "to reach RERA levels". There is a rent cap. If you rent is close to the RERA figures, then he cannot put it up at all. Only if it is a long way below the RERA figure can he put it up, and max (I believe) is 20% rise (so it cannot possible 'reach' the RERA level). It simply is not possible legally for a landlord to put up the rent to RERA figures for a renewal because the rent cap forbids those rises. The RERA index is ludicrously out of date now, and was always rather pointless in my view since it was vague and general. But it is not a legal authorization for landlords to raise rents up to that level. You could complain here but it will achieve nothing. So take your complaint to the rent committee instead - that is why it exists. I have not even gone into the fact that rents are falling, so if your landlord raises the rent by a legal amount, you should look around and take advantage of falling rents.
What a group of crying babies. Landlords have every rights to commend and receive any fees they want, no matter how highs. If you do not like it then move on.
Till Last year Dubai was the most happening place, Safe, ideal place to live in suddenly so many changes Including the Salik, Rent Act, etc and within No time peoples around the world feel Dubai is no more the place it used to be.Pleaseeee do something, SAVE DUBAI.