Residents across the UAE have faced difficult financial decisions in recent months amid the upheaval caused by the coronavirus pandemic.
Among them is whether they could save on what is likely to be the biggest expense in their budget – rent.
But has the market shifted enough to justify the cost of moving? Rents in Dubai and Abu Dhabi have been declining for the past few years on the back of lower oil prices and a property supply glut, although research showed rents were beginning to stabilise in the opening couple of months of 2020 before the full force of the pandemic arrived.
We spoke to various property brokers to find out whether there are bargain deals to be found.
Dubai: More flexibility on cheques and break clauses
Significant shifts in rental rates are yet to be confirmed as the effects of the pandemic are not fully realised. However, brokers are seeing downward changes in pricing, and differing behaviour and attitudes from landlords and tenants.
Nick Grassick, managing director at PH Real Estate, tells The National he has experienced a downward shift of up to 15 per cent during the past three months across all communities and more flexibility with regards to the number of cheques and the inclusion of break clauses.
He reports a rise in tenant and buyer inquiries as there "is a realisation that landlords are in much greater competition".
"I qualify this statistic with recognising a percentage of the tenant inquiries will look to benchmark property values to then leverage their existing rents downward," he says.
"Recognising each home that is rented is typically owned by a different person, with their own personal motivations, the flexibility and variance stated above is obviously not uniform, indeed, some owners have showed no tolerance to the changing market and are still staunch with their asking prices."
Three to six cheques is now the norm, with 12 payments in some cases, according to Lewis Allsopp, chief executive of Allsopp & Allsopp.
In terms of finding good deals, he highlights a one-bedroom garden apartment in Zaafaran 2, Old Town for Dh85,000.
"A three-bedroom apartment in Trident Grand, Dubai Marina can be rented for Dh115,000 and a very popular development at the moment is Akoya Oxygen by Damac where a three-bedroom villa can be rented for Dh65,000," he adds. "This development is relatively new and the properties are modern and fresh with large plot sizes so this price is extremely attractive.”
Prime areas – Palm Jumeirah and Downtown Dubai
Villas in the super prime areas of Palm Jumeirah and Emirates Hills have retained their value and are still receiving plenty of demand, according to specialists at LuxuryProperty.com.
Tenants are willing to pay more if the home has been upgraded. "If you bought a home in 2006 or 2007 and it's basically in the same condition as it was in when you bought it, you can't expect much return out of it," the company tells The National.
In Jumeirah Golf Estates, some of the best deals are hovering in the mid-to-high Dh200,000 range at about Dh230,000 for a four-bedroom semi-detached and upwards of Dh275,000k for a high-quality four-bedroom villa.
"Downtown Dubai is another area flooded with stock, especially with the release of four Address properties by Emaar, among several other high-profile properties," LuxuryProperty.com says.
"A three-bedroom apartment at the recently completed The Address Sky Views went for Dh350,000 late last year. At present, the price is roughly Dh200,000. There are similar cases across all prime properties in the area, with discounts averaging 15 to 20 per cent."
In the mid-market segment and away from the centre of Dubai, Serena in Dubailand (Dh70,000-Dh90,000), Town Square (Dh80,000 upwards for a town house) and Arabian Ranches (Dh90,000 to Dh120,000 for a town house) were highlighted.
Maple in Dubai Hills was also said to be a good option, with three-bedroom town houses for between Dh95,000 and Dh100,000, four-bedrooms at Dh110,000 to Dh120,000 and five-bedrooms at between Dh125,000 and Dh135,000.
'Look beyond the obvious areas'
Naval Vohra, chief executive of Appello Real Estate, says if you’re serious about grabbing a great deal, renters should look beyond the most obvious areas.
He highlights family-friendly Silicon Oasis as having seen a significant drop in rental prices, with one-bedrooms available at Dh38,000 – right up to a four-bedroom villa for Dh137,000.
"Other lower profile areas worth checking out for steals include Al Furjan, Al Khail Heights, and Dubai South (Dubai World Central)," he says.
He also suggests tenants look for deals in their current building or community where they can more easily scale-up without much of the hassle of moving, and for home hunters to develop a relationship with the brokerages.
"If tenants come to us directly with a requirement, we tend to have them more clearly on our radar if a hot deal suddenly lands on our desk," Mr Vohra adds.
"This is an unusual time with all sorts of unexpected transactions taking place."
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Abu Dhabi
'Decisions being made around lifestyle'
The movement restrictions put in place to stop the spread of Covid-19 made it particularly challenging for residents living in apartments without balconies.
As a result, demand has held up for villa communities, according to Andrew Covill, director at Henry Wiltshire in the capital.
"We’re seeing that people who can afford it are moving to villas rather than being cooped up in apartments or studios. The uptake has been good in areas with family villas such as at Al Raha Gardens, while some are moving from downtown to Al Raha Beach and Al Zeina for more space. It isn’t so much about the money but lifestyle," he says.
"We’ve been busy with sales and rentals on Saadiyat Island – people had been looking to move there for some time. We had seven villas sold in a month and while viewing was hard, we managed it. There was talk of 50 empty villas available to rent, and while people don’t believe me, I can confirm there are very few."
Mr Covill says the rental market in Abu Dhabi "hasn't fallen as much as you'd think".
"While it's hard to be completely scientific during this period, rents have fallen maybe in the region of 5 per cent."
The area containing the biggest level of available stock tends to be Reem Island, with rental prices reflecting that.
Competition to secure a tenant is stiffer there because the units are less individual, says Mr Covill.
"Corporate landlords are offering incentives and private landlords are having to match them. The best deal you are likely to get is about 5 or 10 per cent off the rent but some are still being unrealistic," he adds.
Rents in Q1, 2020
More monthly payment plans
Among the deals being offered is a monthly payment plan through Aldar, which has a residential portfolio of 5,000 units.
Three-bedroom apartments at Gate Towers on Reem Island are now listing for between Dh110,000 and Dh115,000 a year, while one-bedroom units are around Dh55,000.
The recently-opened Kite Residences on Reem Island is another location where tenants can obtain a deal – in this case 12 payments and two months free. Two-bedroom units are from Dh110,00-Dh120,000, while three-bedroom homes are Dh142,000.
Ben Crompton, managing partner at Crompton Partners, says apartments targeting the higher end of the market are "huge" and "slowly filling up".
He describes the current market as being in "a holding pattern" with no new arrivals into the country.
"I'd say we're seeing about 40 per cent of our normal rental business for this time of year, and once commercial flights start up again that will change," he says.
"The situation has been favouring landlords because tenants are renewing as they have nowhere to go. If you are a tenant, there isn’t much availability as people haven’t moved out yet – what is empty and available has been for some time. So, for landlords with sitting tenants it is OK at the moment, but those without a tenant will have to manoeuvre."
He added that while an increasing number of tenants are asking for break clauses to be inserted into tenancy contracts, this will take time to become the norm and will require banks, who own a large bulk of units, to take the lead on this.
RESULT
Al Hilal 4 Persepolis 0
Khribin (31', 54', 89'), Al Shahrani 40'
Red card: Otayf (Al Hilal, 49')
Trolls World Tour
Directed by: Walt Dohrn, David Smith
Starring: Anna Kendrick, Justin Timberlake
Rating: 4 stars
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
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Director: Dexter Fletcher
Starring: Taron Egerton, Richard Madden, Jamie Bell
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Muzzamil Afridi, Rahman Gul, Rizwan Haider (Dezo Devils); Shahbaz Ahmed, Suneth Sampath (Glory Gladiators); Waqas Gohar, Jamshaid Butt, Shadab Ahamed (Ganga Fighters); Ali Abid, Ayaz Butt, Ghulam Farid, JD Mahesh Kumara (Hiranni Heros); Inam Faried, Mausif Khan, Ashok Kumar (Texas Titans
RESULT
RS Leipzig 3
Marcel Sabitzer 10', 21'
Emil Forsberg 87'
Tottenham 0
Killing of Qassem Suleimani
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants
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Newcastle United 0 Tottenham Hotspur 2
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Red card Jonjo Shelvey (Newcastle)
Bundesliga fixtures
Saturday, May 16 (kick-offs UAE time)
Borussia Dortmund v Schalke (4.30pm)
RB Leipzig v Freiburg (4.30pm)
Hoffenheim v Hertha Berlin (4.30pm)
Fortuna Dusseldorf v Paderborn (4.30pm)
Augsburg v Wolfsburg (4.30pm)
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)
Sunday, May 17
Cologne v Mainz (4.30pm),
Union Berlin v Bayern Munich (7pm)
Monday, May 18
Werder Bremen v Bayer Leverkusen (9.30pm)
Expert advice
“Join in with a group like Cycle Safe Dubai or TrainYAS, where you’ll meet like-minded people and always have support on hand.”
Stewart Howison, co-founder of Cycle Safe Dubai and owner of Revolution Cycles
“When you sweat a lot, you lose a lot of salt and other electrolytes from your body. If your electrolytes drop enough, you will be at risk of cramping. To prevent salt deficiency, simply add an electrolyte mix to your water.”
Cornelia Gloor, head of RAK Hospital’s Rehabilitation and Physiotherapy Centre
“Don’t make the mistake of thinking you can ride as fast or as far during the summer as you do in cooler weather. The heat will make you expend more energy to maintain a speed that might normally be comfortable, so pace yourself when riding during the hotter parts of the day.”
Chandrashekar Nandi, physiotherapist at Burjeel Hospital in Dubai
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Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
The biog
Favourite car: Ferrari
Likes the colour: Black
Best movie: Avatar
Academic qualifications: Bachelor’s degree in media production from the Higher Colleges of Technology and diploma in production from the New York Film Academy
Company%20profile
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Yabi%20by%20Souqalmal%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3EMay%202022%2C%20launched%20June%202023%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3EAmbareen%20Musa%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInitial%20investment%3A%20u%3C%2Fstrong%3Endisclosed%20but%20soon%20to%20be%20announced%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ENumber%20of%20staff%3A%20%3C%2Fstrong%3E12%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3Eseed%C2%A0%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EShuaa%20Capital%3C%2Fp%3E%0A
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How to help
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May 2017
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Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
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