Dubai: Rent Rises In Dubai’s Residential Property Market Are Gathering Up Steam, With Some Landlords Demanding Far More Than The Official Rental Index From Their Existing Renters In High-Demand Areas.
Rents have risen by roughly 10% throughout Dubai over the last year, but yearly rises for renters in places like the Palm Jumeirah (up 36%), Jumeirah Park (up 25%), and the Lakes (up 21%) have been nothing short of dramatic. Since the second half of 2021, Dubai has seen a big comeback after five years of a depressed rental market.
Tenants are turning to the Rental Disputes Settlement Centre at the Dubai Land Department as a last resort when faced with out-of-turn rental increases. They also want their landlords to adhere to the RERA rental index’s range-bound rate hikes.
“We are seeing many renters seeking to get support from the rental index to prevent high increases, while landlords are asking for renewals,” according to the most recent analysis from real estate firm Core. “Market circumstances drive new leases, and many landlords, particularly of apartments in desirable buildings and neighborhoods, attain their asking prices.”
Update to Rental Index
The RERA rental index shows a wide variety of current rates in some of Dubai’s most popular neighborhoods. There are also certain percentage bands that landlords must adhere to if they intend to raise rents. According to market sources, current demand for rented residences is significantly higher than the five-year norm.
“This demand is not solely from existing residents who are moving to new houses, as it was in 2020 and early 2021,” said the head of brokerage services at a major property business chevalier. “This growth is being fueled in large part by foreigners who are settling in the nation. This will be evident in Dubai’s residential renting market, just as it was in freehold sales.”
As a result, the rent index figures may need to be updated soon.
These Locations Demand More
Outside of the Palm and Jumeirah Park villas, Dubai Marina (34%), The Greens, and The Views (34%) have seen similar rent rises (both by 24 per cent). The rate rises that renters at the Palm apartments are facing are rather significant – 34% higher than in March 2021.
“This will soon reach a point where move to a new home would be less expensive in the long term than paying greater rent on an actual house,” a realtor said. “At the very least, relocating guarantees no rent hikes for the next two years.”
Sales Hit A Purple Patch
April saw continued strong and consistent sales of both ready houses and off plan properties. After Eid earlier this month, developers were anticipated to come out with additional offplan releases, but that may potentially happen in June. According to industry experts, a quiet summer in July and August is unlikely. “European/CIS buyers will continue to be active; nothing on the horizon indicates that demand will slow down anytime soon,” the broker added.