Dubai: Tenants in Dubai planning to shift residences should make up their minds fast – rental gains are showing no signs of slowing down this summer. In fact, landlords are coming up with increased demands, and even revising them upwards within weeks. This could pick up further momentum in September as Dubai’s residential rental market continues its march towards full recovery.
If tenants find themselves with a rental demand they think they can absorb, then go for it is what estate agents are saying. Even relatively budget-friendly locations such as Jumeirah Village Circle are turning pricier, with a one-bedroom there now renting for around Dh53,000 compared to the low Dh40,000s a year or more ago. A two-bedroom would be over Dh90,000 depending on the build, newness of the property and other factors.
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So, is a tenant better off giving in to a higher rental increase by his/her current landlord than seek a new home? “A lot of the time, tenants renew based on convenience and also the increase as per RERA’s (Real Estate Regulatory Agency) rental index,” said Liam Dawett, Leasing Manager at Betterhomes. “It usually is cheaper than the price of entering a new contract, where in some areas (landlords) are asking considerably higher than what was achievable a year ago.
New and prime locations
Later this year, MBR City will be getting a lot of attention as more homes and projects get past completion. Currently, Dubai Creek Harbour is drawing interest from a younger demographic and those who are relatively new residents in the city. A one-bedroom apartment at the high-rise cluster is leasing at around Dh68,000, with a two-bed generating asking rentals of Dh102,000, according to Betterhomes’ data.
Sharpest increases this year
That the Downtown Dubai and the Palm have recorded the biggest rental increases, by 25-30 per cent, in the year to date should be no surprise to anyone. In fact, some of the recent leasing for the Palm’s super-luxury homes have seen rents go above the peaks recorded in 2014.
But in third spot is JBR, where a one-bedroom unit is seeing asking rents of Dh94,250 and a two-bed comes to Dh160,000. JBR rentals and property sales values have operated at a slight discount to those in Dubai Marina. Going by the run up in the year-to-date, that gap seems to be evaporating.
“These three core areas in Dubai have shown the highest gains in H1-22, and this has been due to the influx of people from the attention the Expo brought to the city,” said Dawett. “Plus, the overall safety factor of ‘Dubai being the safest place to be’, which increased demand from new residents. A third factor is that these areas all have globally recognisable landmarks, and therefore the rise in prices have also been through capital appreciation.”