After Covid-19, boom time is back in Dubai as rental property goes in minutes
▶ Prospective villa tenants find the landlord now has the upper hand
Estate agent Charlie Shetliffe has worked in Dubai for five years and has not seen the rental market this busy. Clients are eager to snap up town houses and villas, particularly in the desert suburbs.
The legacy of remote working is a major factor at play, with many professionals now splitting their working week between the office and home.
Mr Shetliffe said the cost of renting rises as the economy recovers, a factor confirmed by the latest industry figures.
“I’ve never seen the market like this at any stage of the past five years,” said Mr Shetliffe, a senior leasing consultant with Haus and Haus.
“We don’t even need to advertise the properties online because there’s so many people already on the waiting list ready to go as soon as something becomes available.”
A typical two-bedroom villa that cost Dh160,000 ($43,570) to rent six months ago here now commands Dh200,000 or more, he said.
A four-bedroom villa will now cost Dh320,000. Six months ago buyers would have expected to pay Dh270,000.
“We’ve seen a huge increase in demand for villas compared to apartments recently,” Mr Shetliffe said.
“Outdoor space, like a garden, is more in demand than ever as well, because people were feeling cramped spending so much time in their apartments.”
While the increase in the cost of renting in Dubai is good news for landlords, it is not so good for those who rent.
Mr Shetliffe said there are challenges in trying to find a happy medium between landlords trying to make the most of the boom in the market and would-be tenants hoping to find a home on a limited budget.
“There’s no doubt it’s a landlord’s market right now but they still have to make sure they are not too greedy and end up asking for too much,” Mr Shetliffe said.
“Tenants still have a budget they cannot push beyond a certain point.”
Suburbs v town life: more modest rent rises on flats
The cost of renting overall is rising, but the increases are far more modest when the citywide average is considered.
Third-quarter rental data from ValuStrat, released in early October, painted a more measured picture than many agents.
The average villa landlord asked for 14.1 per cent more in rent between July and September than they did in the same period last year, while rent on the average flat rose by 2.6 per cent.
ValuStrat said average prices were significantly more affordable than during the sharp rise in 2013-2014, after Dubai won its Expo 2020 bid.
Jumeirah Village Circle is the most searched-for location in Dubai by people looking for budget-friendly flats, according to a third quarter report from property portals Bayut and Dubizzle.
The average cost of a two-bedroom apartment there has risen by less than 5 per cent from June this year to Dh62,000.
The cost for a one-bedroom flat has risen by about 1 per cent in JVC to Dh43,000.
Dubai Marina remains the most popular location for a luxury flat, the report said. Prices increased between 6 and 12 per cent across the board.
The average rental cost of a one-bedroom flat in Dubai Marina is Dh67,000, with twobeds going for Dh100,000 and three-bedroom flats demanding Dh156,000.
There has been no increase in rental prices at all in areas such as Bur Dubai, where the average cost of one and two-bedroom flats is the same as in the second quarter, at Dh45,000 and Dh66,000.
‘Landlords shouldn’t be too greedy’
Mr Shetliffe was showing three-bedroom and four-bedroom villas to clients when The National tagged along.
He was also accompanied by an agent for the landlord, hoping to strike a deal and get the property off the market.
“The landlords often have a lot of agents in their ears,” he said.
“I’ve been in the situation where the tenant offers to pay the asking price, and you think it’s a done deal.
“Then, the very next day, you’re told someone has come in offering more money.”
Another sign the scales are tipping in the favour of Dubai’s landlords is a renewed demand for rent to be paid by one annual cheque, rather than cheques throughout the year.
It was not uncommon for some landlords to accept 12 monthly cheques in recent years, allowing tenants to stagger payments.
Not any more, Mr Shetliffe said.
“Now because of the demand it’s going back to a lower number of cheques per year.”
‘A good community and a school nearby’
New arrivals such as Leo Zambitte, a marketing manager who is moving from London with his wife and daughter, are looking for a villa in the suburbs.
“My company wants me to move here because we do a lot of business in the region and it’s easier to manage that from here,” he said, after being shown around.
“We’re looking for a place that’s the right size for us with a good community and school nearby.
“It has to be reasonable though, as we don’t want to bankrupt ourselves.”
Another estate agent said the demand for town houses and villas exploded during the pandemic, which led to many people moving from flats to bigger properties in the suburbs of Dubai.
“People started to move to cost-effective villa communities outside of the centre of Dubai in the pandemic,” said Leigh Wilmot, senior property consultant with Treo Homes.
“This has resulted in the availability of town houses and villas reducing, hence the price increase that we are seeing now.”
Mr Wilmot works in the Town Square community in the outskirts of Dubai on Al Qudra Road.
Renting a three-bedroom town house there would have cost Dh80,000 last year.
The same type of property is now up for rent at Dh105,000.
Four-bedroom town houses are up to Dh120,000 from Dh95,000 in the same period.
“Out of 2,500 properties on our books, I would say we have four available right now,” Mr Wilmot said.
The increase in rental costs is even higher in other parts of the emirate, he said.
“There are properties in Dubai Hills that were renting for Dh100,000 to Dh125,000 this time last year,” Mr Wilmot said.
“Now you are looking at Dh190,000 to Dh200,000 for those very same properties.”
Another area experiencing rises is Damac Hills, also close to Al Qudra Road.
“The demand we are experiencing in Damac Hills is exponential. A villa that I rented to a tenant last year for Dh185,000 has rented this year for Dh275,000,” said Conor Thompson, from Allsopp and Allsopp.
“A high number of my clients are families who have relocated from the UK and Europe.
“With the market showing no signs of regression, I am confident that this demand will continue throughout Q4 of 2021, and is not showing any signs of slowing down.”