With property values continuing to fall, we ask Keren Bobker from Dubai independent financial advisors Holborn Assets about how to get a better deal
With Cavendish Maxwell reporting that Dubai rents fell five percent in Q2 alone, many residents will be wondering how those statistics can percolate through to their own tenancies.
Keren Bobker of Holborn Assets, who also runs a page on Facebook for British expats, is well placed to offer advice on the current rental market and how price falls can work in tenants’ favour.
In the current market, should tenants be looking to negotiate a lower rent at the end of their contracts? And is there a level which should people be looking to?
That does depend where you are and what rent you’re currently paying, but in general I think people should be looking to lower their rents. I don’t think 10 percent is unreasonable in the present market.
How should tenants go about this?
There are several things a tenant needs to do before approaching their landlord: The first is to check their tenancy agreement and check how much notice they need to give so they’re not leaving any attempted negotiation to the last minute.
Secondly, have a sense of the market and try to find out from real estate agents’ websites and friends what properties of the same size in your area are going for.
Once you have this information, write to your landlord and politely ask about a rent reduction. Be polite. Honey works better than vinegar.
So how far out from the end of their contract should they be doing this?
Most notice periods are around two months, so it would make sense to start the process between two and a half and three months before your tenancy ends. That leaves enough time to negotiate.
What if landlords say no?
Well, that’s their right but it pays to be politely persistent. Most landlords, particularly individuals who may be relying on the rent for income or mortgage payments, would rather have a stable tenant that face the prospect of a void period or the expense of refurbishments – a tenant leaving is a big hassle for them, too.
Part of your case should be outlining that you’ve looked after it. Larger landlords, especially institutional ones with large portfolios, may be less willing as they probably already factor in voids.
Are any areas holding their value?
Arabian Ranches remains popular. Obviously it’s not unaffected by the price falls but there is a constant demand for villas there – it’s a great community with good schools and facilities for families. The Marina, too, attracts the younger arrivals.
What is driving the prices lower? Is it oversupply or are people leaving?
A combination. There are a lot of new developments in Dubai and people have been moving from older buildings to newer ones, with newer kitchens and the like.
I am the admin for a Facebook group for expats, and it seems that families are leaving – both as a part of the natural expat lifecycle here but also because the salary packages aren’t what they were. But people are coming in. I run “New to Dubai” sessions and the next one is fully booked. It’s still a popular place.