Will Hean is delighted rents are starting to fall as more property comes on to the market. The investment director at Kenmore Property Group rents a villa in Dubai's Jumeirah area for Dh250,000 (US$68,000) a year and plans to look around for a "better deal" when his lease runs out.
"Although our rent has come down, I feel, come the end of our lease, we'll look for a better deal because there are good ones around and landlords are being more flexible," said Mr Hean, 43, who is married with two children. With 88 per cent of the UAE's population owning no property here, renting villas and apartments is a way of life. And according to a YouGovSiraj survey commissioned by The National, many agree with Mr Hean that the outlook for renting has greatly improved.
Badee Rahhal, 44, from Jordan, rents an apartment in Abu Dhabi and hopes prices will come down. "I've been here 35 years. It was very easy to rent before, but it's very difficult now," he said. "Now I think the rent is coming down a little bit and it's getting easier to find something." The YouGovSiraj survey shows that 68 per cent of the country's residents occupy rented apartments and that 14 per cent rent villas or houses. Just 6 per cent live in villas or houses they own, 4 per cent live in apartments they own, and 8 per cent live under other types of arrangements.
But with rents falling and mortgage costs still high, some property owners are struggling to cope with their payments, and this is discouraging prospective property buyers from entering the market. Antony Cruz, 24, from India, is a planner for a property developer and lives in Al Quoz, Dubai. "In real estate, rent is still going down, so it's still like a crisis. The boom was where rent and everything else was high, and now we are at the trough."
The market for property owners is unusual because of historically low interest rates caused by the dirham's fixed rate of exchange with the US dollar. In theory, the low-interest-rate policy of the US Federal Reserve should keep UAE mortgage rates low. But some property owners have said banks are not passing their savings on to customers and are keeping mortgage rates high. Michael Aldendorff, 39, works for a furniture company in Dubai and owns a property in Discovery Gardens in Dubai. He says his mortgage payments are starting to get out of hand.
"I'm actually being penalised by owning a property in Dubai because my mortgage has increased," he said. "Mortgage companies are very non-responsive and not understanding of the situation and circumstance ? I've had a discussion with them several times about why my mortgage payments are going up and not down and they keep blaming the UAE Central Bank. "If I could give back my property, I would." @Email:firstname.lastname@example.org