Since July, more new contracts record rent drops in JVC, Greens, Arjan
Dubai: First-time residents to Dubai and those tenants looking to move out of their current apartments have been getting more favourable lease agreements in multiple locations.
These slight lowering in rents are showing up in new contracts being signed for homes in Jumeirah Village Circle and Traingle as well as in Arjan, Majan and even in the Greens.
This has been visible since early July and continues to be the case even in the first week of August, according to broker and landlord sources.
If these trends continue in the coming weeks, this will be the first time since Q4-2020 lease renewals that rents are dropping in multiple locations in Dubai. (The 2020 drops happened being the year of the Covid and the disruptions that were caused as a result.)
But there are locations that are still recording increases through the summer. At Dubai Silicon Oasis, new rent contracts show steady rises, primarily in the 5%-10% range. (A 1-bedroom apartment listings show rates of Dh70,000 and over.)
As lower rent options become available, there has also been a slight decline in the number of rent renewals at some of these locations in Dubai, according to data from GCP Properties.
In the last 3-4 years, renewing contracts on their homes have been seen by a majority of Dubai tenants as still being the best option to keep their rental payments in check. Even when landlords have increased rents by 10% or more in successive years.
Now, more tenants find that looking for new premises would make it easier for them to manage their future rents.
Some property market sources say the partial rental softening could still be a ‘peak summer trend’, and that only October or November data will reveal the true picture.
Another interesting trend from recent weeks is the significant decline in evictions being carried out by landlords. This trend had peaked in 2023-24 and even in the initial weeks of this year, but evictions are now dropping drastically.
More landlords see the rationale they are better off trying to negotiate a new lease with existing tenants than try to get them out.
“When it comes to most sought-after locations, Jumeirah Village Circle apartment and villa rents are both down since June-July,” said Eima Hajimalan, Manager at GCP Properties. “These are what the latest Ejari rental contracts are showing for the location.
“The same trends are also showing up in JVT and Dubai South, to an extent.
"With rents starting to fall in most communities, the time has come for tenants to have sensible discussions with landlords. And that's partly because tenants have greater choice with all the new buildings that are being delivered."
In JVC, currently, a 1-bedroom apartment shows asking rents in the range of Dh70,000-Dh85,000, depending on whether the building is new or whether the landlord is offering furnished options as well.
Did tenants who signed up for new leases in recent weeks just got lucky that landlords were offering them lowered rates? Or can the the trend continue?
Whatever be the case, this is the first summer since mid-2021 that there have been some rental declines on new leases. That in itself makes the current situation unique.
But sources do add that the days of 15%-20% annual hikes seem to be getting over. "There are more leases where renewals have been kept to 3%-7% hike," said a property broker. "Landlords need to release that there will be a surge of newly completed apartment buildings that are due from October and then through the next 6-12 months.
"Even if only 50% of these buildings are completed in this time, that's still many more apartments for residents to choose from."
Which is why landlords will be better off managing expectations starting now. Some have already done so.
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