Sunday, June 6, 2010

Dubai Rentals - Bargain Time

What's interesting about this article is the assertion of a new found willingness by landlords to negotiate rents.

Apparently, tenants are taking advantage of the market to move from older to newer properties.  Or to properties that are more convenient.

As a result not only are the explicit rentals coming down, but landlords are offering incentives like free months, absorption of utilities, enhanced maintenance, etc.

A key factor going forward will be the balance of inward and outward migration by expatriates.  A negative trend will depress rates.  A positive one may lead to stability and some increases.  And the balance will have clear implications for property and development firms as well as their creditors.
According to Colliers estimate, average rental rates have declined by 25 per cent between Q2 2009 and Q1 2010. As per Harbor's calculations, International City rents are 20 per cent lower than Q4 2009 and eight per cent lower than Q1 2010; Discovery Gardens rents are 13 per cent lower than Q4 2009 and eight per cent lower than Q1 2010, while rents in Dubai Silicon Oasis are five per cent lower than Q4 2009, but remain stable compared to Q1 2010.

Robinson points to a one-bedroom apartment being leased in December 2009 in Discovery Gardens for Dh57,000, which came down to Dh50,000 in March 2010 and is available for Dh40,000 in May.

However, a studio apartment in International City, leased for Dh30,000 in December 2009, declined to Dh22,000 in March 2010 and is being still leased for the same rate.

2 comments:

Diogenes@Sinope said...

This coincides with my general observations, lots of people in my building in downtown Burj Khalifa moved from International City/Discovery Gardens since the rents in the area have gone down so much. Also anecdotally, while the "expat bleed" isn't as bad as it was in 09, I haven't really noticed an uptick (not so many farewell parties, but its always the same people at gatherings).

Abu 'Arqala said...

Diogenes

Thanks for your comment.

It's very helpful to get comments on news items or content on this blog -especially from those close to the story.