Dubai real-estate market registered a recent price drop, which made the rental properties affordable. This is great news to more than 7 million expats working in this modern cosmopolitan city. Now they have multiple options and time for choosing a property in convenient locations with better facilities. Generally, residents choose Sharjah for affordable rental accommodations. However, they need to face heavy traffic driving over an hour every day through the emirates road connecting both these emirates.
With the fall in property prices, there is also a steady decline in property rentals. Thus, residents can easily rent a one or two-bedroom apartment at a budgeted price around the prime locations in the city. This has encouraged the residents to bring their families and settle down in Dubai. Asteco, the pioneer property management company in UAE reported an average of 35 per cent price drop in the property rentals since 2014. The good news is there is an additional 3 per cent drop in property rents in the third quarter of this year with a 12 per cent total drop in last one year.
Allsopp & Allsopp, the pioneer British owned real estate agent in Dubai registered an increasing number of tenant registration. From August 2018 to August 2019 the increase is almost 14 per cent. They further added that tenants are finding it convenient to move to houses with lower rents having similar facilities or upgrade to a better location which was earlier impossible. Although this has negatively affected the Dubai’s real estate market, it gave stability and affordability to the residents.
“51% of our tenants have decided to upgrade and move to a home which was previously out of their reach,” according to report by Allsopp & Allsopp.
Affording luxury homes in Dubai is now within budget
Another report revealed that relocating to a luxury home in Dubai is now possible as its within budget to most of the residents. More than 15 per cent of tenants living in apartments have shown interest to move into spacious villas. These are luxury properties in Dubai that comes with a swimming pool, garden for barbeques and spacious playing area for children. Most of these villas are located in prime locations around the city and are now within budget.
“30 per cent of our tenants moved from one community to another this summer, some of which were upgrades, for the simple reason that they had more choice within their budget”
Palm Jumeirah, Dubai Marina, etc. are some of the prime locations in the city. Property rent for a two-bedroom apartment was approximately Dh160,000 in 2018 which dropped to Dh130,000 in 2019. Thus affording luxury homes in Dubai is now within budget to most of the residents.
Opportunity to buy a property in Dubai
The Emirati law allows an expat to buy a constructed property in Dubai. Due to the drop in real estate prices, residents can save a part of their accommodation rent by moving into a cheaper property. With these additional savings, there is an opportunity to build a corpus and pay the downpayment which is around 33% of the property value to purchase a new home in Dubai.
Dubai job market opportunities opened up because of the upcoming Expo 2020 attracting more foreign labours. The drop in property rentals is beneficial to all those who newly moved to Dubai and trying to settle down. Allsopp & Allsopp further reported that almost 29 per cent of their tenants were those who newly moved to Dubai this summer.
Residents are not bothered about the rent cap law
A few years back, 'rent cap law' was introduced all over emirates to safeguard the interests of the tenants. The basis of the law was to put a maximum capping based on the RERA Rent Index while increasing the property rents. Undoubtedly, it was an excellent step by the UAE governing bodies. Due to the ongoing scenario of falling rental prices, residents are no more bothered about the rent cap law.
Read information about cost of living in Dubai.