At Melltoo, we don’t just work hard to give you a premium product where you can sell your used items or rent your property, we also aspire to offer you a holistic experience into living in Dubai and the UAE, and affording your living.
This is why we teamed with the team of propertyright.ae to keep you updated with regards to rental news and laws in the UAE. Tobias Young, the CEO of propertyrights.ae, wrote the following article regarding the recent rent decrease in the Emirate of Dubai.
Although Dubai is only one of the seven Emirates of the UAE this seems to be the property hot-bed that gets the most Press coverage.
A lot has been made of recent reports of a slowdown in the Dubai property market. Some of the sales prices have been easing back and as a byproduct of that, so have some of the rental prices. The stories surrounding the apparent easing have all been repeated, and what started off as a possible 5-10% pull back is now being talked of as 10-20%. Whatever happens, this is going to take time to filter through to the market. We here at www.propertyrights.ae believe that the softening of prices will take time to play out, and initially will only affect vacant properties. It is going to take some time to filter through to the incumbent tenants.
www.propertyrights.ae have had a large number of questions as to why a rent decrease is unlikely in the short term, and why are people not seeing the benefit now. The simple answer is that these are forecasts for the whole market during 2015, while in reality; we are only 6 weeks into the year. So these decreases will take time to filter through. Further to that, for incumbent tenants to see a benefit there will need to be a lot of cheaper rental properties for people to move into before the rents on their current property will move down.
For example, if someone is paying 100,000AED in rent, at what point does it become beneficial for them to move into a similar, yet cheaper property? If that move is then possible, negotiations with the current landlord could possibly see a small reduction, but it is unlikely to be the vast amounts talked about. Once again, this is going to take time. Using the example above, when moving property there is still likely to be agent’s fees and moving costs incurred by the tenant. This would essentially negate the benefit of moving into any property that isn’t more than 7-10% cheaper than the current rent paid.
Overall, the market may soften, rental prices may ease, but the benefits to people already living in Dubai are unlikely to be seen or felt for a long time. By the end of 2015 www.propertyrights.ae expects to see people considering moving to slightly bigger properties on the basis of it being cheaper and easier to upsize than it will be to make cost savings moving into similar sized properties. So, if you see anymore articles, be patient and let’s see where the market is in 6-12 months time.
To keep up-to-date with all of the property news in the region, please follow us on the following two social media links.
If you haven’t already, please visit our website www.propertyrights.ae, where subscribing is simple, easy and will take less than two minutes of your time.
Rents in Dubai May Fall Up to 10% in 2015..Here's Why
Rents in Dubai are decreasing. Our property experts friends from propertyrights.ae explain why. Download Melltoo on your phone directly on melltoo.com