House rent payments could go monthly

Dubai: A correction in Dubai's luxury real estate sector could change the dynamics of the city's freehold market and could transform the rent payment practice to a monthly installment from the current annual or quarterly payments, according to a report.

The current seven per cent rent cap would be shortlived, said the report.

"The rental cap will be a shortlived control mechanism, as the significant residential product that is to be delivered in the next 24 months should curtail rising rents due to market forces," said a latest report by Colliers International, a global real estate consultancy company.

Nearly 150,000 housing units will be added to Dubai's property market in the coming years, the report said.

Low occupancy

About 30 per cent of apartments in Dubai Marina are empty, while owners live in 33 per cent and the other 37 per cent are rented out by buyers.

"While it is possible for the market to experience quite a large price correction as a result of our excess supply forecasts, the unique financial liquidity of this region and the tendency of landlords to tolerate low occupancy rates in preference to dropping rents may go some way to cushioning the size of such a correction."

It sounds good, but hard to carry out. The property price may be stable for a while but it is hard to have downturn since no real estate prices are down except Japan since the 80s. Dubai has just begun its property business and there is great demand for it.
Victor
Dubai,UAE
Posted: October 12, 2007, 13:17

A transparent tenancy law would be appreciated by all sides, tenants and landlords. Despite the services offered by Baladia to arbitrate between the parties no real protection of tenants is given. Often, tenants are being pushed out of their rental premises after having financed the landlords construction. This is not fair and could even be classified as abuse. A monthly rent payment would further bring relief to the tenants and align common practice with international standards.
Raphael
Dubai,UAE
Posted: October 12, 2007, 13:02