KHALEEJ TIMES, Saturday, Jun 27, 2020 | Zul Qaadah 06, 1441
Residential rents in Dubai see a sharp drop, especially in these areas
Emirates:
Residential rents have fallen across the board in 2020 with the sharpest
drops witnessed in Dubai Land and Dubai Sports City.
According to market experts, the cheapest areas for rent right now are
International City, Dubai Production City (IMPZ), a few projects in Dubai South
and Dubai Land (Queue Point and Town Square) and Jumeirah Village Circle (JVC).
Overall the villas and townhouses have comparatively fared better than
apartments as tenants look forward to upsizing. More indoor and outdoor spaces
are in demand now, after an extended period of being restricted at home.
Rental Outlook
Prathyusha Gurrapu, head of research and advisory, CORE, explained: "The average
apartment rents have fallen 10 per cent year on year (June 2019 vs. June 2020)
and 6 per cent from the beginning of this year (Jan 2020 vs. June 2020). The
average villa rents have fallen 9 per cent year on year (June 2019 vs. June
2020) and 5 per cent from the beginning of this year (Jan 2020 vs. June 2020)."
While the Covid-19 pandemic has created an environment of uncertainty, it's said
areas of high supply have been hardest hit by rent falls over the last 12
months.
Richard Waind, group managing director, Betterhomes, said: "Areas such as
Business Bay and Jumeirah Village Triangle (JVT), which have very high levels of
supply, have seen rents fall over 10 per cent in the last year."
He added: "During the lockdown, rental activity at Bhomes fell by approximately
70 per cent, with only those with a pressing need to move actually finding a
property digitally and moving via the permits scheme.
Since the lockdown, rental activity has rebounded to pre-Covid levels with two
main drivers for tenants to move over the last period has been a search for
greater value and the desire for more space."
Options aplenty
Experts also state that lots of supply over the last 24 months has meant tenants
are faced with plenty of options. Therefore, many are driving a hard bargain
with landlords to get the best deal.
Lewis Allsopp, CEO of Allsopp & Allsopp, opined: "Over the last three months,
prices have dropped slightly. However, there is an influx of tenants registering
their interest in properties on the market. Tenants are seeing the drop in
prices as an opportunity to move to a more desirable community or a larger
property for their family.
We are seeing more landlords accepting multiple cheque payments with 3-6 cheques
now becoming the norm and in a lot of cases, landlords are accepting 12 cheque
payments."
However, property experts concur that the drop in rents has been arrested to a
certain extent due to reduced number of properties entering the market in the
recent months.
Craig Salmons, managing director, HMS homes, said: "Surprisingly, we thought
prices would continue to reduce, especially during a global pandemic. However,
it has not necessarily been the case. Most rents have stayed pretty consistent
due to a reduced amount of properties entering the market. The majority of
properties that we expected to come available during April, May and June were
significantly reduced due to many tenants renewing or extending. This means at
present we have more people looking for properties than those we have available
for rent.
"In certain areas, such as Jumeirah Park and The Palm, we have even managed to
get a premium on specific property types due to the lack of options available."
Thus, the cost of living in Dubai is set to become more affordable as rents
decrease across the spectrum. This in turn will enable local companies in the
UAE to be more competitive.
|