Steady flow from West to stablise rent market

Westerners and Arabs are continuing to come to Dubai and help stabilise the rental housing market, real estate companies said.

The news comes as real estate experts say they are hopeful of a turnaround in the housing market with the decline in rental levels to slow in the coming months.

Figures from estate agency Better Homes show a steady rise in the number of people renting from February of this year.

According to the firm a third of new tenants are from North America and Western Europe arriving in the country to fill middle management positions.

Speaking during an industry breakfast conference this week, David Macadam, director of the company's commercial division, said he was hopeful of a recovery by the second quarter of 2010.

He said people were taking advantage of the fall in rents, which had become more affordable even to people who may have had their pay cut as a result of the economic crisis.

He said: “We have been busier than we have ever been in the last few months and it is encouraging.''

Macadam said: “Normally we do transactions in the high 200s but it has been very promising lately.

“We have found that about a third is new people coming into Dubai from Western Europe and North America who are generally in middle management positions.

“A third are people shifting from Sharjah, Abu Dhabi and other emirates and the rest are people from other Middle Eastern areas.''

He said in February his company did 208 transactions, in March it was 308 and April saw 323.

He did not expect rent prices to fall any further and the market to recover but perhaps not to the levels seen at the height of the boom.

He said; “I don't think there will be an exodus or mass exodus of people out of Dubai in the next few months.''

That meant there was less chance of supply exceeding demand even with the potential 29,000 new residential units being completed by the end of the year.

The news comes just weeks after a Landmarks Rental index for May found rental prices stabilising in the Marina area after a jump in people snapping up cheap offers.

Sunil Gomes, of Guru Real Estate, said he expected the rate of the decline in rent levels to slow down.

He said: “I don't think we will see anything until the second quarter of 2010. The first thing we need is for people to regain their confidence but for that to happen the banks need to open their wallets.''

Developers must also complete building work on projects they have started to maintain their and Dubai's credibility with investors.

Elaine Jones, chief executive of consultancy firm Asteco, said there was interest from wealthy investors to buy, in the commercial sector, but often the owner did not want to sell at a lower level.