New tenants pay higher rents in Dubai – News

Rents will remain elevated in the second half of the year, but rent growth is expected to slow eventually, experts say

Jumeirah, Emirates Hills, Downtown Dubai, Arabian Ranches, Business Bay, Dubai Marina and Discovery Gardens remained the top picks for renters in the first half of the year. — file photo

Tenants will continue to pay higher rents for new contracts in Dubai despite higher demand for apartments and villas in the second half of 2022, experts say, but the Real Estate Regulatory Authority (Rera) will limit the rise in lease renewals.

Rents continued to rise at double-digit rates in the first half, analysts and executives said, as landlords raised prices amid rising demand and a lack of available inventory, especially in popular villa communities. They expect rents to remain elevated in the second half of the year, but expect rental growth to slow eventually.

Haider Tuaima, director and head of real estate research at ValuStrat, said residential rents in Dubai were on average 20 percent higher than last year.

“This increase applies only to new rents, as the renewal contract amount is limited by Rera’s rent calculator,” Tuaima told harrij times.

He said current trends had slowed, particularly in the villa segment, with apartments up 4.2 per cent and houses up 3.3 per cent quarter-on-quarter. The slowdown in rental growth is expected to continue in the second half of the year,” he said.

Swapnil Pillai, associate director of research at Savills Middle East, sees positive trends in the rental market, as pointed out in the consultancy’s latest report, with rental growth in Dubai buoyed by broader lifestyle trends in other markets, reaching 5.3%

“The outlook for prime residential rental growth remains positive as demand for unit types that are sought after by tenants continues to outpace supply,” Pillai said.

“Renting remains a practical but short-term solution for those looking to experience a location or accommodation before making a long-term and often expensive commitment. Large living and outdoor areas that facilitate mixed working models will continue is a key consideration,” he said.

Relocation of high net worth individuals and investors

Ata Shobeiry, CEO of Zoom Property, said the rental market in Dubai has been on the rise, with annual growth rates of about 21 percent for apartments and 22 percent for villas, mainly due to the influx of high-net-worth individuals and investors. Dubai is their main residence.

“The emirate’s business-friendly policies have also contributed to this growth. The same trend is expected to prevail in the second half of the year as well,” Shobeiry told harrij times.

Demand for short-term rentals will increase, especially due to the upcoming FIFA World Cup in Qatar later this year, he said.

lack of villas

Average rents for apartments and townhouses rose 29 per cent and 33 per cent, respectively, while house rents rose 64 per cent, real estate agency Betterhomes said in its latest report, as a shortage of villa landlords continued to take advantage of the current sales momentum. out and exit the market.

“Because of rising prices and tight supply, more tenants are choosing to stay put, negotiate with landlords and extend their current leases rather than enter the highly competitive rental space. As a result, Betterhomes’ rental transactions are down 25%,” said Betterhomes, Inquiries fell 17%.

Popular areas for rent

Responding to a question, Shobeiry said Jumeirah, Emirates Hills, Downtown Dubai, Arabian Ranches, Business Bay, Dubai Marina and Discovery Gardens remained the top choices for renters in the first half of the year.

In addition, The Greens, Liwan, Living Legends and Discovery Gardens have also seen an increase in demand for rental properties, he said.

“I believe these areas will also continue to dominate the rental market in the second half of 2022,” he said.

Elaborating on tenants’ priorities when looking for rental properties, he said there were a number of factors driving the rental market.

“I’m sure it varies from person to person. However, in general, people look for accessibility and area covered. Configuration, nearest landmarks and amenities are other common considerations. And there’s a greater focus on consumer quality of life, with an emphasis on being equipped with the latest There is an increasing demand for properties with facilities,” he said.

— muzaffarrizvi@khaleejtimes.com