Dubai: Holiday home stays in Dubai could get a whole lot more expensive from as early as next month after Downtown Dubai stops taking on any more such visitors from September 19. As of now, an estimated 1,000 odd furnished apartments within the Downtown are listed for holiday home leases or short-stays.
Market sources say with those 1,000 properties removed, rates could rise anywhere between $50-$250 a night for stays in other units in Dubai, of course depending on the location and the quality of the unit itself.
Plus, the October to end January period represents the peak season for visitor arrivals in Dubai, whether it be for business or for vacation breaks towards the end of the year.
“No market can expect price stability when in 10 days, more than 1,000 holiday homes get de-listed at one particular destination,” said one operator. “Dubai for now doesn’t have the spare capacity to absorb the removal of these many units. There will be a “price surge” for the remaining listings.”
Late last week, Emaar, the master-developer, sent out a circular notifying that all holiday home leasing within Downtown Dubai should cease from September 19.
The reason given was that such leases are a disruption for other residents at the many high-rises across that community.
Currently, short-stay rentals at the Downtown start at $150 a night for an upscale studio.
“The fourth quarter of 2018 was a breakout period for holiday home stays in Dubai,” said the operator. “The industry was building up to critical mass, investors were picking up apartments to place them for short-stays, and there were enough properties already being listed in prime locations such as the Palm, Dubai Marina and Downtown.
“This fourth quarter could have been even better and lasted all the way up to end of the Expo 2020 in April of 2021. The loss of Downtown access will be keenly felt.”
Losing out on the holiday homes in Downtown is only half of it. Real estate agents and landlords with units in Downtown are bracing for the impact that 1,000 units will have if suddenly listed for long-term rentals, i.e., the one-year kind. “This will drive property prices - and rents - down at the Downtown as holiday homes had balanced this destination upto now in terms of yield,” said a market source.
Currently, one-year rents for a one-bedroom unit at the Downtown could be had for Dh70,000 all the way to Dh140,000, based on various factors. A similar unit in the selling space is listing for slightly under Dh1 million. But prices are under pressure as more towers will be delivered there in the next 12-18 months.
Meanwhile, holiday home operators are awaiting word from Dubai Tourism & Commerce Marketing (DTCM), the authority responsible for issuing holiday home licenses, to issue its advisory on the Downtown shutout.
“We have not cancelled any bookings and DTCM has not advised us to do so yet,” said Vinayak Mahtani, CEO of bnbme. “It’s not so simple to cancel a booking - a guest has made reservations based on certain contracts. They would have booked flights and excursions (if here on vacation). It’s not simply about cancelling that booking.
“Payments are dependent on the type of booking and cancellation policy. At least for now, the capacity available for holiday homes in Dubai has not been affected.”
But other industry sources add that there have been concerns among clients after the Emaar decision became known. “We are about to enter the peak season and (the decision) has created unnecessary insecurity in tourists’ minds,” one of them said.
“There are tourists who have confirmed bookings for the coming 12 months and who will now be notified that their preferred accommodation is not available any longer. They will seek compensations for that. This will end up deflating the entire holiday home business… just when it was ready to grow to the next level.”