The old residential districts of Dubai have a unique charm. Homes in areas, such as Karama, Bur Dubai, Oud Metha are spacious, while the communities offer a vibrant lifestyle and convenient commuting options. Niral Sunil Jhaveri, head of property management at Better Homes says most tenants of Karama, Bur Dubai, Oud Metha tend to stay longer if the property is well maintained.
“Tenants here seldom want to move. These residential communities still hold value and have seen a drop of around 5-10 per cent compared to last year. The oldest tenant in one of our managed unit is there for 20 years,” says Jhaveri. “The average rental for a one-bedroom is around Dh55,000 and for two-beds the current rent is Dh75,000. Although the market has been slow because of the Coronavirus pandemic, we have started seeing movement now in terms of leasing.”
Lower price volatility
Historically these areas haven’t seen a lot of price volatility because there have been long-term tenants and not too many vacant units, says Avinash Uttamchandani, sales manager of Rocky Real Estate. “In the last few years, even though the vacancy numbers have increased, rents have not fallen as much as other areas because these communities are easily accessible.”
Specifically, with Asian communities, these areas are in high demand due to bigger apartments and the presence of balconies, he adds. “Apartments with balconies have always been in demand. We have seen an increase in this trend due to the Covid-19 situation as families are looking for an outdoor area even if they are not stepping out. Furthermore, buildings with dedicated play areas have also seen an uptick in demand due to these reasons.”
Types of units
There are a variety of apartments in these areas. “From simple, spacious apartments to a high-end luxury experience, there is enough choice,” says Jhaveri. However, he cautions tenants to check and verify maintenance of properties. “You need to check there is an in-house team looking after facilities and building management or if it’s done by an appointed company. The condition of the building you are moving to is an important factor. “
Availability of units
There are more available units in the community as many families have left the country or downgraded and sent their family back home, say experts. However, this has not affected the prices drastically. “The good and new ones are still holding on to their price and waiting for the right tenant. The existing tenants are negotiating rent with their landlords so that they can avoid the moving hassle,” says Jhaveri.
Dubai apartment rent price declined by 5.6 per cent since the beginning of the year and declined by 10.9 per cent when compared to same term last year, says Ozan Demir, director, operations and research, Reidin. “Similar to the city level, rentals have continued to soften in Al Karama by 4.9 per cent, Oud Metha by 4.2 per cent and the level of decline was 4.9 per cent in Bur Dubai in general.”
Factors like oversupply in the Dubai real estate market has coupled with the Covid-19 effect, and the expected real estate recovery that didn’t start at the beginning of the year have led to downward trends. “Even though both sales and rental prices stabilised in the last quarter of 2019 and in the first two months of this year, level of price drops have accelerated during March and the second quarter of due to the pandemic,” says Demir. “We are observing stable occupancy rates in these areas but expecting rentals to soften further albeit on a lower rate in the near term,” he adds.