Are you part of the majority, watching your income being washed down the drain thanks to incredibly high rents? Well, we have some good news – the prices are dropping!
According to new surveys and industry sources, rents in Dubai could see a significant decline from 2016 onwards. Why is this happening? Clementine Malim, client manager at Ascot and Co., says it’s down to a “a combination of over supply and unsustainable growth. New projects such as Casa (Arabian Ranches phase 2) and Mudon phase 1 and 2 are now handing over. Great new products mean landlords have to remain competitive especially in terms of cheques and pricing.”
So, it comes down to the basic supply and demand rule. When the supply is greater than the demand (ie too many property options) there has to be a shift, and the shift here (much to the rejoice of many residents) is lower rents.
Gulf News recently reported that some may start benefitting from the events straight away, revealing: “The cost of renting in Dubai has been predicted to start falling in 2015, with analysts forecasting a five per cent drop before the second half of the year.”
“I think there will be a slow and continuous decrease for the duration of 2015,” added Clementine. “It will plateau toward the end of the year.”
Clementine suggested that the drop will occur across all property types. “The drop will be across villa and apartment rentals. Both are affected by supply and demand. Also all areas will feel the affects,” she said, “but primarily ‘prime Dubai’, Marina, JLT and Emirates Living etc.”
“All end users and families will benefit the most,” she added. “People who need to remain central due to work commitments yet feel the pinch by the number of cheques they pay in and cost of living in central areas.
Often a drop is followed by a spike, yet Clementine is confident we don’t need to worry about that just yet. She said: “There isn’t anything to suggest there will be a spike, this is more a case of a necessary correction and shows signs of a mature market.”
So what sort of decrease in rental prices can we expect? According to Clementine we can expect to see a five to 15 per cent decrease across one bedroom and studio apartments but the drop can be as high as 15 per cent across bigger villas and four to five bedroom apartments.
For information about whether you are paying the right rent, check the RERA calculator.
