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Dubai residents who have stayed for the long haul during the past decade or more will have experienced both extremes of the rental market cycle.
Like any market, Dubai’s property sector has had its ups and downs amid global economic fluctuations since 2008.
As a result, long-term tenants may have found they were paying almost half the annual rent at some point in time compared with the earlier years.
Rental rates in 2008 were much higher than today with a rapidly expanding workforce and economy. But the global financial crisis sent rents tumbling in 2009, and they remained subdued until 2012 as some recovery emerged.
Market confidence rose again in 2013, when Dubai won the bid to host Expo 2020 and they peaked in 2014 before a combination of low oil prices and a strong US dollar marked the beginnings of a correction.
There has been a steady fall in rental rates in the following years as additional supply continued to outweigh demand. The emirate also started expanding away from the main thoroughfare of Sheikh Zayed Road and out into the desert with a number of new communities.
Now is the time for Dubai’s residents to “scale up” from their current rental situation… if they can afford such a switch.
“Look for deals in your current building or community where you can easily scale-up without much moving hassle and with only a slight increase in price,” said Naval Vohra, CEO of Appello Real Estate. “You may be surprised what’s available for those who inquire”.
Once the COVID-19 concerns die down, landlords and tenants in Dubai are hopeful of some action taking place in the residential rental market. For many, it could mean they have to look at options because of changes in their job or financial circumstances. But there are still opportunities to go up the rental ladder.
“This is an unusual time with all sorts of unexpected transactions taking place,” said Vohra. Whether that’s trading up from a “one-bedroom apartment to a two-bedroom – or finally make the leap from apartment to villa (and garden) – now could be the time”.
Locations with the best drops
The brokerage firm cites locations such as Silicon Oasis, where rents on a one-bed is now at “a snip” for Dh38,000, Al Furjan, Al Khail Heights, and Dubai South where rates have turned even more affordable.