Dubai: Desperate landlords are trying to lure tenants and buyers to their properties with lucrative offers to counter Dubai's rental oversupply.
Radio 2: Nasreen Abdulla reports on landlords trying to attract tenants in Dubai
* Audio supplied by Radio 2
A Dh1 million luxury car and a night in the world's tallest tower complete with groceries have been offered as bait as the great rental hunt in the city intensifies. It's prompting New Dubai landlords to offer extravagant deals to outbid each other to secure tenants as a massive surplus of properties outstrips demand.
Industry sources estimate there might be between 50,000 and 100,000 residential units oversupplied by the end of next year, taking the market years to absorb.
The Dh1 million 2010 Maserati car was for the buyer of the Dh3.5 million Marina Six Towers apartment. The deal, listed by Powerhouse Properties, has not been taken to date, but is still negotiable.
Other owners have also become creative to tempt tenants with non-cash offers in a bid to halt the rental price crash.
Lars Hansen, Owner of Larsen and Hansen Real Estate, said some property owners are offering incentives to tenants like free TV and internet services to stem the fall in rents.
Some landlords are even willing to pay relocating costs, including packing and transport. Some are bypassing agents to save on commissions and are advertising online.
Hassan Al Shouli, marketing manager of a UAE-based website, said with increasing competition, residential rental listings seem to have doubled in the past three months in Dubai and Abu Dhabi.
Attention-grabbing deals were witnessed for the first time late last year.
At that time, the first online deal for a night in the world's tallest tower complete with groceries for $285 (Dh1,045) was offered at www.mydubaistay.com as the landlord was among the estimated 800-odd luxury apartment owners who were unable to secure long-term tenants.
The website's manager said the offer had to be called off as it upset nearby hotels. Finally, the apartment successfully fetched short-term rentals with a minimum five-night stay deal.
Real estate agents predicted rents in Dubai will drop for another 12 to 24 months. They are expected to bottom out when rents fail to make up for the "hassle factor" of owners managing repairs, maintenance and associated costs, etc.
Selling not realistic
According to Mario Volpi, Leasing Manager of PowerHouse Properties, most owners ideally want to sell rather than rent. However, given the current market, selling was not a realistic option for those who have been forced to rent to offset any debt, he said.
PowerHouse agent Levent Hassan said the Dh1 million limited edition free luxury Maserati car was on offer as the owner was eager to sell his apartment rather than rent it out.
However, Hassan said in many cases there is a stand-off between owners who bought in boom time — as they refuse to drop prices — and tenants who are spoilt for choice in the market. He said he has to educate such owners on a daily basis about what to expect in current market situation.
Volpi and Hassan said Jumeirah Lake Towers and Marina are the most oversupplied areas. They predicted a deadlock when landlords may get fed up with the hassle of renting properties and took them off the market, reducing supply.
Already, a few landlords who spoke on condition of anonymity said they chose to keep properties vacant as the rental income failed to cover maintenance and services fees and the "hassle factor" was just not worth it.