As the residential marketplace maintains to soften, the addition of the latest gadgets has positioned stress on sales and apartment prices in Dubai. According to Ozan Demir, director of operations and studies at Reidin, even as sales prices have fallen by way of eight according to cent, rental costs have dropped utilizing eleven in keeping with cent compared to the identical term ultimate yr. In the villa section, income and condo prices have dropped with the aid of eight in step with cent and 5 consistent with cent respectively.
“Increasing handovers have persisted in affecting costs in most locations across Dubai as traders and tenants now have extra choices,” explains Demir. “Areas with excessive handovers have recorded the very best decline in fees. While the upcoming delivery in the Dubai real estate market is anticipated to position similarly strain, the decrease in expenses has opened new possibilities for buyers, stop customers and tenants.”
The charge of decline is pushed by using various factors. Still, by and large, the supply of competing inventory, says Manika Dhama, head of strategic consulting and studies at Cavendish Maxwell. “Overall, new deliver is using opposition and tenants are, as a result, in a more potent role to barter condominium terms in most cases. Landlords also are becoming greater flexible with charge options and supplying incentives to maintain existing tenants and attract new ones.”
This might be the quality time for renters to improve their lifestyle, says Jeevan D’Mello, global network control professional and senior lecturer on the Dubai Real Estate Institute.
“Declining rents do position stress at the cash float of property investors. However, it’s miles prudent to look at the financial system in preferred and excessive assets fees are not certain what’s in the excellent interest of a developing metropolis,” says D’Mello. “Reasonable charges attract customers, and with all that Dubai has to offer, the metropolis is becoming much extra appealing for overseas traders. For long-time period sustainability, an affordable rental rate point is crucial.”
Three-yr hire freeze
In the midst of all this, the Dubai Land Department has currently discovered that it’s miles considering concept to introduce a provision that will lock the hire for three years. While the concept is under review with the authorities, Property Weekly spoke to belongings proprietors, tenants, and belongings agents about their views.
1. Guarantees ROI fee
“Securing the hire for 3 years can clearly favor landlords in a marketplace where rents are declining due to new inventory,” says Khurram Adam, a landlord from Pakistan. Adam owns a -bedroom rental in Tecom and a studio in Jumeirah Village Triangle. Freezing rents will allow landlords to have assured returns for at least 3 years, he provides.
Another landlord, Dhruv Thakkar from India, who owns more than one studio in Jumeirah Lakes Tower, concurs, noting that a tenant’s commitment to the property for 3 years might be top for landlords in a fluctuating market. “So if the belongings owner is capable of getting a set price for three years, it’s suitable and secures his earnings is for the next three years,” says Thakkar.
2. Helps in budgeting
A hiring freeze will assist in lengthy-term budgeting for salaried tenants, says Pakistani tenant Syed Abbas, who rents a one-bedroom apartment close to Dubai Airport International Airport. “Now the fashion is to seek a distinct unit every 12 months to take advantage of market modifications,” says Abbas. “But even as doing so, we lose cash on movers and incur other relocation costs. So we can shop on such extra fees if we are tied to a condo for 3 years. We can finances ourselves appropriately when we finalize the condo.”
3. Good for brand spanking new tenants
“This is a good idea,” says Indonesian Yoan Joice Beatrix, who rents a one-bedroom rental in Nadd Al Hammar. “New tenants can, in reality, benefit from the law. It is crucial to have a law binding the landlord now not to grow the hire for their own blessings.”
4. currently not wanted
While there is no readability on the matter, Rajiv Ghanekar, a senior real estate broking with Keller Williams Real Estate, says it could not be urgently wished through the market.
“I reckon the authorities will have a look at the economic effect of a 3-yr hire freeze and perhaps satisfactory-song the method — best to have it carried out whilst the marketplace demands,” says Ghanekar. “I don’t see a actual want for a 3-12 months hire freeze at the least on the residential aspect of the marketplace. Moreover, the Rental index calculator gives a truthful solution to the query of rent hike/revision. At gift, landlords and tenants are collectively negotiating and agreeing upon bendy and precise win-win solutions, so this is certainly not wanted now.”
5. Brings consistent cash float
Suraj Rajshekar, the popular supervisor of Rocky Real Estate, is supportive of the no-growth proposal.
“I accept as true that this is an amazing choice so that it will be basic useful to each person,” says Rajshekar. “It will permit households to live in the belongings for an extended period, price range their budget and not be afraid approximately the once a year rental increase that typically impacts their way of life. Hence, it brings balance, the experience of belonging, and adds to the comfort of the humans staying inside us. It also helps the landlords because it will carry them constant coins waft and saves them the cost of finding a new tenant.”