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Many landlords are also moving towards a ‘vacation home concept’
UAE residents who are renting for the first time are likely to pay more for a smaller space due to rising rents and a shortage of villas, real estate industry executives said.
Demand for larger apartments and villas has been on the rise since the pandemic triggered movement restrictions. Today, demand continues to grow even as Covid cases are decreasing and precautionary measures have been eased. That means new tenants entering the market will have to live with the new reality of paying more for less.
“With rent prices rising every day, new tenants entering the market must understand that they may have less money than those already on the market with larger units. While rent increases are inevitable, those People with larger units are likely to keep those…so there are smaller units that are more readily available,” said Morgan Irwin, managing director of Provident Real Estate.
Kingsley Properties group chief executive Ali Rao said new buyers were turning to apartments as annual contracts made it more feasible for them to move every year.
He said many residents continued to live in smaller apartments as they now realised the changes they were making during Covid-19 “could be more sustainable and cost-effective”.
Ayman Youssef, vice president of Coldwell Banker in the UAE, said a shortage of villas and townhouses continued to drive up prices in the segment.
“While this trend is less aggressive in condos, we are witnessing a steady increase in demand for luxury serviced residences and sea-facing condos. On the other hand, the affordable real estate market has seen modest price increases,” he said.
Landlord moves to holiday home
Irwin shared details of new trends in the residential market, further revealing that landlords are also turning to the “vacation home concept” as it gives them better yields and flexibility.
“Additionally, landlords are starting to see the value in property management and having a team or individual manage the property from start to finish makes it easier for both landlords and tenants,” he said.
Investors are also very excited right now, Rao said, seeing holiday homes as a great way to earn more from rent.
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Shilpa Mahtani, COO and co-founder of bnbme Holiday Homes by Hoteliers, told Khaleej Times earlier that holiday home owners earn between 10% and 50% more than traditional long-term rentals.
“The biggest advantage is that once they start renting out, homeowners can make 25 per cent more than they did last year with the help of positive reviews and our marketing,” she said.
waheedabbas@khaleejtimes.com
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