Mario Volpi: Brexit effect will trickle down to affect Dubai property
Has the Brexit withdrawal of the United Kingdom from the European Union affected property values, sales and rentals in Dubai? NN, Dubai
This is a good question and one I’m sure, will lead to many different answers if posed to many people. Looking at the sales sector first, my opinion would be as follows;
Given that UK passport holders are the third most popular set of people that engage in buying Dubai property, I can see that possibly they now may think twice about buying here as all of a sudden they have a good alternative option and that is to buy in the UK. The main driver to this is the fall in the value of sterling, which now makes UK house prices that much cheaper when compared to the strong dollar.
We all know that central London property is vastly more expensive than the rest of the UK, where a perceived drop in asking prices due to sterling’s weakness will have an effect on buyers possibly parking their hard-earned money in the UK rather than Dubai. Even London house prices will now obviously look more attractive, but the defined drop in value may still be beyond some people’s reach.
This “UK alternative “ option is acting like a sponge, soaking up interest from buyers who would perhaps otherwise look to Dubai. While it is still perhaps too early to say, fewer buyers will mean a longer period of price instability here in Dubai. I would like to counter -balance this statement to say that from a micro-perspective, we do have plenty of buyers looking, but it’s just their price expectations are nowhere near the expectations of sellers, thus we have a potential stalemate market at the moment.
In terms of rentals, I think this sector will be fine. On the one hand we have many new people taking up new jobs in the construction, hospitality and leisure industries that will feed the rental market. But to counter-balance this (which will mean no early return to rental price inflation), we have many brand new units being handed over this year and next which will also act as a sponge in soaking up the rental demand. Potentially therefore, we will see the rental market continuing along the same lines of today’s market conditions. Some areas will be subject to price reductions and in other more popular areas (where demand outstrips supply) prices remain will more buoyant.
The reality is that Brexit will have an effect on Dubai’s market, but only time will tell exactly by how much. It is also worth noting, however, that despite this, Dubai has much to look forward to in the future, not forgetting that Expo 2020 is now only 50 months away.
I have a tenant residing at my IMPZ apartment that I have been trying to evict for nearly three years now. The rent is so low as they are paying an old rent. My so-called agent went to court to evict the tenants and again the court favoured the tenants. I do not trust the agency, which is why I am taking action myself. NN, Dubai
You have not really given me enough details. You have been trying to evict your tenant for three years, but for what reason? If the tenant has paid the rent on time then you cannot evict him. There are procedures in place to raise the rent so check the Rera rental calculator which can be found on the Dubai Land Department website www.dubailand.gov.ae.
If an increase is allowed, it will also state the percentage. The only way to effect this increase is to inform the tenant at least 90 days before the expiry of the current contract that there will be an increase as per the law at the next renewal. If you miss this window deadline you will not be able to change anything in the contract for the next renewal and this also means the rental amount even if the rental calculators states that an increase is allowed.
The only other way to evict a tenant is if you wish to sell the property or need to take it back for your own use or use of your immediate next of kin. In either of these two cases you will have to send a 12-month notification notice via notary public by registered mail, sent upon expiry of your present tenancy contract.
I understand why perhaps you are still struggling with this, especially if either of you or your agent have not served the proper notice and at the correct time. Each time a judge will find in favour of the tenant if the correct procedures have not been followed by the landlord.
Mario Volpi is the chief sales officer for Kensington Exclusive Properties and has worked in the property industry for the past 32 years in London and Dubai. The opinions expressed in this article are those of the author and they do not reflect in any way those of the institutions to which he is affiliated. It does not constitute legal advice and is provided for information only. Please send any questions to firstname.lastname@example.org.
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Published: September 7, 2016 04:00 AM