Dubai Residents Turn to Property Ownership Amid Eviction and Rising Rents

Dubai Residents

Dubai’s Real Estate Market, Which Began Its Remarkable Growth After The Pandemic, Has Shown No Signs Of Slowing Down This Year.

According to Richard Waind, group managing director of Betterhomes, tenants in Dubai are looking more and more to purchase real estate out of fear of obtaining eviction notices from landlords as a result of the surge in rental rates.

In both the sales and rental markets, there is a limited supply of new residential units, according to Betterhomes’ first-quarter 2023 report. Which results in higher prices for purchasers and little relief from rent for tenants.

“Rising rents and the fear of receiving an eviction notice are increasingly being cited by residents as the main reasons to get on the property ladder,” Waind said in the report’s preface.

Real estate in the emirate continued to see an unheard-of run that began following the outbreak this year as well.

In the first quarter of 2023, real estate sales in Dubai increased by 80% to Dh157 billion from Dh87 billion. During the same time in the previous year, according to official data released this month. During the comparable time, the number of transactions increased by 49%. From 26,066 to 38,715, the sales value increased by 62.0% to Dh89 billion.

Record Leasing

The trading business reported that while occupancy rates in leasehold areas reached a record high of 97%, rates in freehold areas remained constant.

Rental rates “are a direct reflection of supply and demand. While the rate of increase has slowed from a high of 35% last year. Prices are still growing at an annual rate of 16-20%,” the report stated.

According to the report, flat rentals in Al Khail Heights increased by 14%. Double-digit growth was also reported in Jumeirah Golf Estate, Al Habtoor City, and Dubai Creek Harbour.

Not A Lag

Betterhomes anticipates that this year will see the delivery of 35,000 additional residential units. About 5,000 new homes were finished in Q1 2023. Which is much less than what the market demanded at the time, the report said.

“We don’t expect there to be a sufficient increase in ready supply to materially impact prices until late 2024 or into 2025,” Waind stated.

He said that any concerns about a market slowdown had been allayed by the local real estate market’s robust performance in the first quarter.

“The market has been remarkably robust, bucking global trends and attracting an ever-widening global audience,” Waind said. “Despite the sustained higher trajectory of interest rates, and the wobbles observed in the banking industry in March.

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