UAE: Over 42% of Dubai residents saw rents rise in the past year

 

 

The majority of Dubai residents either saw their residential rents increase or remain the same in the past year, a new survey has found.

The survey of 300 Dubai residents by comparison site compareit4me.com found that 42.6 per cent of tenants in Dubai saw their rents rise over the past 12 months. Meanwhile 47.1 per cent of respondents said that their rents stayed the same.

Despite market reports claiming rents have dropped significantly in the last year, only 10.3 per cent of tenants in the emirate registered a drop in rents over the past year, the survey found.

A recent report by Core Savills found that apartment rents witnessed year-on-year declines of between 4 per cent and up to 9 per cent in the first quarter of the year.

Another report from CBRE said that residential rates in Dubai fell by 1 per cent quarter-on-quarter in Q1, and that the decline could be attributed to “constrained demand”.

“While we cannot say that a consultancy with such high standing has got it wrong, there does appear to be some disconnect between what market reports say about rental rates in Dubai and what people are actually seeing on the ground,” said Jonathan Rawling, CFO of compareit4me.com

“Our best explanation for this is that renters in Dubai aren’t aware that the market could now be more favourable to tenants. Several survey respondents said that they ‘hadn’t thought to ask’ their landlords about a reduction in their rental rates, highlighting the fact that many tenants simply accept their lot when it comes to renting.”

The survey also found that among those who registered a drop in rents, 71.4 per cent said that they saw a discount of 5 per cent to 10 per cent compared to last year’s rates, while the remaining respondents saw a reduction of up to 5 per cent.

However, the survey found that the decrease in rents was also dependent on the area.

In Bur Dubai, 57.1 per cent of the residents saw their rents go up in the last year. Among them, 75 per cent saw an increase of 5 per cent to 10 per cent.

Similarly in Deira, 50 per cent of respondents said their rents had increased over the past year, with a third among them seeing hikes of 10 per cent to 15 per cent.

In Jumeirah, not a single respondent indicated that their rental rates had decreased over the past 12 months, with 40 per cent reporting an increase. Of those who saw their rents go up, half reported an increase of 5 per cent to 10 per cent.

The areas where tenants saw a drop in rents included Al Barsha, The Palm Jumeirah and Jumeirah Lakes Towers, with the majority (71.4 per cent) of survey respondents living in these areas reporting a decrease of 5 per cent to 10 per cent.

Looking ahead, over 45 per cent of respondents expect their rental rates to increase over the next 12 months, while 38.2 per cent said they expected their rent to stay the same.

Only 16.2 per cent expect a decrease in rents in the next year.

“When you’re talking annual rental rates of Dhs100,000 and above, even a 5 per cent decrease can net you some pretty handy savings,” said Rawling.

“After all, you won’t just be saving on the cost of your rent, but you’ll also see your Municipality Fees drop slightly, along with your annual agency fees. As a result, it’s worth asking your landlord for a price cut if you’re renewing soon,” he added.

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