Tenants will continue to enjoy good deals in 2020 as there is plenty of supply across different locations. The price of property rental in Dubai remains highly competitive due to many factors, however, property experts agree that the influx of supply is the main challenge. Naval Vohra, CEO of Appello Real Estate reported that last year rents went as far as 21% lower than they were two years ago.
Vohra went on to comment:
The downward trend is also observed in rents for Dubai villas and townhouses,” adding “Hence, this is a great time for renters as they have so much choice on offer and bargains abound.
ValuStrat reported that annual rent in Dubai dropped by 9.2% in the first three-quarters last year compared to 8.4% in 2018 and 9.1% in 2017.
One can now rent a studio apartment from Dh28,000 onwards in areas such as Jumeirah Village Circle [JVC], Jumeirah Village Triangle [JVT] or Discovery Gardens, says Vohra. When you add a few thousand dirhams, you can move into Dubai Marina, renting a studio for Dh37,000 or in Downtown Dubai for Dh53,000 upwards.
When comparing rental contracts with Rera index, Firas Al Msaddi CEO of fäm Properties remarks that rents have dipped as a whole.
For example, the average rent of a studio in Business Bay is Dh50,000, whereas in the Rera index the minimum rental of the studio in Business Bay is Dh50,000, adding, “We rented a furnished studio in Bay’s Edge in 2017 for Dh70,000; in 2018 the rent was Dh62,000 and in 2019 the rent dropped to Dh50,000.
Due to this, agents are forced to negotiate prices with owners.
Even if there is only one property in a tower at a low price, agents use that to reduce the prices of other units in the tower,” says Al Msaddi. Also, new communities have been already established, and some are coming soon. Many prefer to live in Business Bay to be next to Downtown, but for a lower amount soon Meydan will take some demand from Business Bay and Downtown.
These rental dips make property investment less attractive; this is because the service charge is high in some projects. It has been reported that current service charges in some properties might reach 40% of income.
It is expected that despite the anticipated economic boost from Expo 2020 Dubai residents will continue to enjoy lower rents throughout 2020. For those who are interested in renting in Dubai, whether for a personal or business property read the important factors to consider before renting in Dubai.
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