More power to tenants

Increased rental affordability across Dubai’s residential market, reports Valustrat

This time last year there was much talk questioning the effect of implementing the 5 per cent value-added tax and excise tax on certain goods, which would cause rising inflation and impact spending power of Dubai’s residents. It is almost end of the year and we find that Dubai’s annual inflation rate stands at 2.2 per cent with marginal monthly changes. This low rate is caused by declining housing and utility expenses including rental expenses, which according to the Dubai Statistics Centre, retreated 3.6 per cent since last year. ValuStrat’s third-quarter real estate review report shows that overall residential rents declined 20 per cent since 2016 and another 11 per cent since last year. In general, average annual rents for two-bedroom villas were Dh126,000, three-bedders at Dh177,000 and four-bedders villas at Dh255,000. Average annual rents for studio apartments were Dh51,000, onebedders at Dh74,000, twobedders at Dh105,000, and three-bedroom apartments at Dh149,000. To sweeten the deal, landlords wanting to retain tenants now offer free rental months, waive chiller

fees and some agree to more post-dated cheques. “It is certainly a good time for tenants to negotiate a better deal and/or move to more conveniently located homes near work or school. Tenant migration patterns from north to south has been observed for many months now. There has been movement from Sharjah to Al Nahda, from International City to Dubai Silicon

Oasis,” said Haider Tuaima, head of real estate research at ValuStrat. “Other patterns were noticed where tenants move from high-rise buildings in Dubai Marina, Jumeirah Beach Residence and Jumeirah Lakes Towers to settle in town houses and villas in Arabian Ranches and The Springs, particularly homes having three or four bedrooms, as rents can be very similar.”