Working at the top end of Dubai's real estate market, over the past few years I've witnessed the incredible journey of this city's rentals market – from its early ‘still figuring things out’ stages to its current thriving, record-busting position on the global stage.
The question many might ask is how did we get here?
Several factors have contributed to the progression of the emirate’s rentals market.
Firstly, the UAE's ambitious Tourism Strategy 2031 has been instrumental in attracting millions of visitors to Dubai annually. With over 17 million tourists alone in 2023, many of whom eventually transition to becoming expat residents, the demand for rental homes has surged.
And just recently we had the news of the gigantic new Al Maktoum International airport project, which will be the largest in the world and cost Dh128 billion ($34.8 billion). It represents a major economic leap toward the future that will boost both the real estate and construction sectors.
The power of a great image
Then there’s social media, which has also played a massive role in normalising the idea of moving to Dubai.
In today’s digital era, where everyone is connected, seeing friends and former colleagues thriving in the emirate makes the move seem not just feasible but desirable – not to mention watching all the reality shows (some better than others, let’s be honest) about the city’s legendary glamorous lifestyle.
Indeed, a major reason for the market’s success has been the fact that the disparity between the quality of life in Dubai and in most people’s home country continues to widen. Put simply, the emirate is an increasingly attractive destination for those seeking better opportunities and a higher standard of living. This is the place where ordinary people can achieve extraordinary things.
Obviously, as more people flock to Dubai in pursuit of their dreams, the demand for rental properties escalates, inevitably driving up prices and making real estate investment a lucrative endeavour for landlords.
Dubai compared to the rest of the world
Okay, Dubai might be glamorous and exciting, but why should landlords consider entering or re-entering the real estate market here as opposed to other major cities around the globe?
Firstly, the demand for rental properties in Dubai remains exceptionally high, outpacing the supply generated by new developments. Despite the vast scale of ongoing construction projects, the emirate’s property market struggles to keep pace with the city's rapidly growing population.
Furthermore, the price per square foot in Dubai is considerably lower than in many other global cities such as London, Paris, and New York, presenting an attractive proposition for investors seeking value and potential returns.
Additionally, Dubai offers unparalleled ease of transaction in property dealings, making it one of the simplest and most liquid real estate markets globally. Coupled with new visa regulations that make it easier than ever to obtain residency, the lure for property investors is powerful.
The new rules good for all parties
Recent updates in regulations, particularly the implications of the RERA calculator update and the new legal requirements for landlords seeking to hike rents, have sparked interest within the real estate sector.
The RERA calculator update allows landlords to legally increase rents by up to 20% upon renewal, providing a fairer deal for those whose tenants are paying below market rates. This adjustment could potentially lead to more tenants transitioning to become homeowners, thereby stimulating the residential sales market.
Moreover, the requirement for a court order to apply for a Rent Evaluation Certificate streamlines the process and promotes transparency by directing all parties to the RERA Index Calculator. This move aims to limit illegal price hikes and ensure a level playing field for both landlords and tenants.
Getting professional support is key
In light of these regulatory changes, the role of trusted, experienced property consultants becomes vital to prospective landlords.
Working with a reputable agent helps them navigate the complexities of the rental process while avoiding potential pitfalls – not to mention the fact agents have an ear to the ground and can offer hot tips that you may miss going solo.
Agents are also hired to mediate the agreement and protect both parties, which is vital during the rental process. They will check and approve contracts/addendums to ensure they are in line with RERA regulations, and complete due diligence – verifying title deeds, Power of Attorney, and ownership documents. They will also facilitate contract signing and payment of rent deposits, ensuring both parties are protected, and advise on Dubai specific processes such as Ejari, Dubai Electricity and Water Authority (DEWA), and move-in permits – particularly helpful if you are unfamiliar with the market here.
All this administrative work is important – but there’s an extra dimension to the service of a great agent and that’s free expert advice and local area knowledge. Experienced agents also often have many off market listings, so looking on your own online could mean you are missing the best stock.
- Jake Walton is Leasing Director, haus & haus Real Estate
