Dubai Forums Dubai Expat Forums Accommodation in Dubai

I lived in Dubai for 15 months and have now left for the summer (when the lease ran out). I will be returning in September for 6-9 months. I will also be making a 2-3 week visit in July. What are the rents looking like and is there any relief in sight? (ie where do you all think they will be at the end of this year?)

I was paying 60K for a studio in Jumeriah since early 2005.

Thanks,

Trygve

Heh! People say there should be a downward trend. I do not see it.... Instead I see greedy landlords asking exhorbitant amounts of money and seeing their flats/villas remain empty.

Excellent business acumen on the part of these landlords...

totally agree liban

i have to say there does seem a reluctance for landlord to react to lower but stange how they reacted to increase rents.

Still its their loss

When we visited K and Shaf the other week i was gobsmacked at how many empty props there were in the springs

Trygve wrote:I was paying 60K for a studio in Jumeriah since early 2005.

Wish I owned a flock of studios in Jumeirah.

Expect rents to continue upwards or at least stay static until perhaps mid-next year.

arniegang wrote:When we visited K and Shaf the other week i was gobsmacked at how many empty props there were in the springs

Several years ago (1996 or so?) there was a significant surplus of accommodation in Dubai. Rents did drop slightly but only slightly and only for a year or so. Landlords seemed to prefer to keep them empty than rent them out cheaply. As it turned out, that may have been the smart thing (for them) to do since population increased quickly enough to raise market rent to the levels they were asking.

sharewadi wrote:

arniegang wrote:When we visited K and Shaf the other week i was gobsmacked at how many empty props there were in the springs

Several years ago (1996 or so?) there was a significant surplus of accommodation in Dubai. Rents did drop slightly but only slightly and only for a year or so. Landlords seemed to prefer to keep them empty than rent them out cheaply. As it turned out, that may have been the smart thing (for them) to do since population increased quickly enough to raise market rent to the levels they were asking.

Although you are likely right this makes no sense to me. It is like the landlord mafia combines forces and says if no one lowers prices we'll all make money in the future. I'm hopeful though now that there are more small investors who have mortgages and realize that something is better than nothing prices will be more in line with market demand.

Okay maybe a bit of a pipedream but as a soon to be homeless individual I need to believe this

fayz wrote:Although you are likely right this makes no sense to me. It is like the landlord mafia combines forces and says if no one lowers prices we'll all make money in the future.

I presume that's exactly what happened.

Dribbling on a bit to todays situation...

As a renter, I'm happy to see a rent restriction in place. If it was enforced, it would be even better.

Unfortunately, rent restrictions often eventually have the opposite effect of what was intended. Property investors are less enthusiastic to buy because they can't get the return they want so developers are reluctant to develop because sales are less certain. So a shortage of accommodation arises and one way or another, rents will go up anyway - usually by throwing out current tenants and increasing rent for new tenants, or by requesting "key money".

What is interesting is that this rent restriction was specified as only being for 2006 - it may be a reasonable compromise to ride out the period of excess demand.

I'm hopeful though now that there are more small investors who have mortgages and realize that something is better than nothing prices will be more in line with market demand.

Okay maybe a bit of a pipedream but as a soon to be homeless individual I need to believe this

Makes sense to me - but we may not see that scenario played out till sometime next year.

The pegging of rents was just a publicity stunt. In a true "free market" this could never exist. Market forces dictate rent/property inflation combined with supply v demand.

A cap on rent increases in Dubai is the same as a speed limit on its roads...[a joke]