Football fever is inevitable and inescapable, especially in a region such as the Middle East where it is often a source of national pride. With the FIFA World Cup in Qatar less than six months away, we can already feel the vibrations in the air and rumblings underfoot that will, in no time at all, build up to a frenzy of packed stadiums.
That’s all to be expected in Doha, but what about Dubai? At just an hour’s flight away, Dubai is perfect for the fans who want to enjoy all of the football action while it’s happening, but might prefer to spend their time between matches away from the throngs. Consequently, we can expect to see a huge uptick in short-term and vacation rentals in Dubai over the duration of the World Cup. In fact, enquiries are already on the rise.
First come, first booked
Everyone knows that if you’re traveling during peak tourism season or a major event, you need to book your flights and accommodations as early as possible to lock in the best deals. That certainly seems to be the case for football fans.
It goes without saying that October is when we will hit the boiling point, with people trying to arrange last-minute stays for themselves, or where possible, for family and friends. But the savvier travelers are already looking for the best pricing in the short-term rental space in the hopes of beating the rush and securing their place well before the World Cup begins.
However, those in the market for a good deal might not find quite what they’re looking for, even with an early enquiry. Quite a few landlords understand that the World Cup is going to be a huge draw for short-term tenants who are looking for an urban getaway where they can relax between matches. As such, they are more inclined to charge a higher price even if one were to start booking now.
If they fail to rent out their property in the summer, they can easily make up for that as the World Cup draws nearer, when they will be ins a position to charge the same price - or higher - based on market activity. That being said, it certainly won’t be a deterrent for the diehard fans who want to secure an accommodation as soon as possible, even if that comes at a premium.
Knock-on effect
Different segments of the real estate market rarely operate in isolation. As the short-term rental market heats up, it impacts the supply of homes available for long-term rentals, which creates an upward pressure on prices. Rents in Dubai have been creeping up over the past 15 months, with some areas seeing increases as high as 40 per cent in the first quarter of 2022.
Homes at the prime and super-prime level are in short supply, which has led to significant rental hikes in areas such as Palm Jumeirah, Dubai Marina and Jumeirah Beach Residence. These are also among the top areas for short stays in Dubai – who doesn’t love a vacation by the beach, after all? – which suggests that we might be looking at further price increases going into the end of the year.
The effect would also be felt in real estate sales, though perhaps not as sharply. It’s quite an unlikely scenario that homes up for sale will be pulled off the market so they can be rented out for the World Cup, but it does mean there is a slightly lower chance of new homes coming into the market.
Not many think market pressures are going to ease off in the near future. We’ve seen small dips in the market caused by Covid variants and rising interest rates, but the overall graph is still trending upward. Units in areas such as Bluewaters Island have flown off the market at record speed due to the design, location and pricing. It’s rare for anything to come back on the market as a resale or even a rental right now.
There might be a few units that end up being put up for rent through November and December, but there is still a shortage of stock compared to the demand coming in and there will be some additional pressure on sales prices in these areas.
Dubai real estate has had a strong first half to 2022, breaking a 13-year record in May. While inflation and rising interested rates are expected to have an effect at the mid-level of the market, it’s expected that the affordable luxury and super prime segments will continue to bring in record numbers over the remainder of the year. And the potential for brisk business during the World Cup should certainly add to those numbers.
