As the economy recovers from the onset of the pandemic and Dubai property prices recover, tenants say they face sizeable rises in rent.
In some of the most popular areas of the emirate, rent has increased by up to 20 per cent after prices dipped during the pandemic.
In October last year, Lebanese resident Hoda Ayache, 52, rented a spacious flat in Dubai Sports City through an estate agency so she could work from home more comfortably.
She paid Dh42,000 a year for the two-bedroom property, and said this was a good deal at the time, despite months of maintenance glitches including problems with the air conditioning and plumbing.
The agency sent me an email and stated that according to the Rera calculator they could increase the rent by 20 per cent as the property was already rented out at 40 per cent less than market value
Hoda Ayache,
Dubai resident
In July, three months before her contract was up for renewal, she was told the rent would rise to Dh50,400 a year.
“The agency sent me an email and stated that according to the Real Estate Regulatory Authority (Rera) calculator, they could increase the rent by 20 per cent as the property was already rented out at 40 per cent less than market value,” she told The National.
“I wouldn’t have minded so much, but the apartment was in such bad condition. For the whole time I was living there, the air conditioning did not work correctly and I had continuous leaks in the bathroom ceiling.
“Despite several visits from the maintenance team, the landlord or agency didn’t fix the issues, so when I got that email about the rent increase I was shocked.”
After months of going back and forth, trying to negotiate the price, Ms Ayache decided to move out of the apartment when her contract expired.
Lucas Charles, a public relations executive from New Zealand, said he faced a yearly increase of Dh6,000 on his two-bedroom property in The Greens two months ago. He had been paying Dh56,000 per year for two years prior to the rent increase alert.
“I know the rental market has bounced back from the Covid-19 pandemic, which is good for landlords, but some people are still faced with pay cuts from work,” he said.
“To get slapped with a considerable rent hike is stressful. I didn’t want to move from the property as I love the area, so I tried to negotiate a fair deal.
“After several unanswered emails, I eventually managed to speak to someone but had no luck trying to lower the increase. I ended up just agreeing to the new contract.”
He now pays Dh62,000 a year for his apartment.
Estate agents say property market is booming
Estate agents working across the city said the rental market has not been this busy in years. Clients are eager to snap up townhouses and villas – particularly in the city’s desert suburbs – as quickly as possible. The legacy of remote working is a major factor, with many professionals now splitting their working week between the office and home.
Mario Volpi, sales and leasing manager for Engel & Voelkers, said landlords can legally raise the rent by up to a fifth, regardless of whether they are charging below market price.
“The most he or she can raise it by in any one year is 20 per cent, but it has to be in line with what the Rera calculator states,” he said.
“The likelihood is, if a tenant is now being charged 20 per cent more from one year to the next, they must have been paying well below market value to begin with.
“When someone moves into a property, a tenancy agreement is written. In that, it states that if a tenant or landlord wish to make changes to a contract, be it the rent or number of cheques given, this has to be communicated three months before the year is up,” Mr Volpi said.
“If the landlord has communicated a rental increase within the 90-day period, in writing, and it is in line with the Rera calculator, if the tenant does not agree, their only other choice is to vacate the property.”
How Dubai’s rent calculator works
Rera was established 2013 to regulate the market and prevent it from overheating. Its rental calculator shows whether or not an increase is applicable and uses criteria such as location, property type, current rent and number of rooms. It works by comparing properties with similar ones nearby.
For instance, if the current annual rent is below 10 per cent of the market value, no increase is allowed. But if the rent is between 11 per cent and 20 per cent under the market, a maximum rise of 5 per cent is permitted. This progresses to a maximum of 20 per cent.
Mr Volpi said coming to a fair agreement on rent is all about negotiating and “establishing good landlord-tenant relationships”. But ultimately, if the landlord does not agree to the tenant’s revised price, the tenant has to vacate.
While tenants may feel hard done by in this case, Mr Volpi said the current property laws often tend to “favour and protect the tenant”, as the government does not want to be seen allowing landlords to push tenants out unfairly.
“When the market is going up, as it is now, the landlord has to abide by the Rera calculator not the market price,” he said.
“But when prices go down, the rent calculator goes out of the window and the tenant relies with the market forces and, as such, has way more bargaining power.”
Naseer Alam, founder and chief executive of Expert Properties in Dubai, said demand for residential property was rising.
“This is majorly because of people visiting the UAE for Expo 2020 Dubai,” he said.
“It has led to a substantial rise in the properties, be it short or long-term, particularly studio apartments preferred by executives or villas opted for by families. As per our records, this rise in price is greater than anything that has been in the past three years.
“Some of the most prominent areas where these properties have witnessed an increase in demand and rents are Dubai Marina, Al Wasl, Jumeirah, The Palm and Dubai Silicon Oasis.”
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
The Pope's itinerary
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
DEADPOOL & WOLVERINE
Starring: Ryan Reynolds, Hugh Jackman, Emma Corrin
Director: Shawn Levy
Rating: 3/5
Company profile
Name: Back to Games and Boardgame Space
Started: Back to Games (2015); Boardgame Space (Mark Azzam became co-founder in 2017)
Founder: Back to Games (Mr Azzam); Boardgame Space (Mr Azzam and Feras Al Bastaki)
Based: Dubai and Abu Dhabi
Industry: Back to Games (retail); Boardgame Space (wholesale and distribution)
Funding: Back to Games: self-funded by Mr Azzam with Dh1.3 million; Mr Azzam invested Dh250,000 in Boardgame Space
Growth: Back to Games: from 300 products in 2015 to 7,000 in 2019; Boardgame Space: from 34 games in 2017 to 3,500 in 2019
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
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.”
Results
Stage 7:
1. Caleb Ewan (AUS) Lotto Soudal - 3:18:29
2. Sam Bennett (IRL) Deceuninck-QuickStep - same time
3. Phil Bauhaus (GER) Bahrain Victorious
4. Michael Morkov (DEN) Deceuninck-QuickStep
5. Cees Bol (NED) Team DSM
General Classification:
1. Tadej Pogacar (SLO) UAE Team Emirates - 24:00:28
2. Adam Yates (GBR) Ineos Grenadiers - 0:00:35
3. Joao Almeida (POR) Deceuninck-QuickStep - 0:01:02
4. Chris Harper (AUS) Jumbo-Visma - 0:01:42
5. Neilson Powless (USA) EF Education-Nippo - 0:01:45
The biog
Favourite hobby: taking his rescue dog, Sally, for long walks.
Favourite book: anything by Stephen King, although he said the films rarely match the quality of the books
Favourite film: The Shawshank Redemption stands out as his favourite movie, a classic King novella
Favourite music: “I have a wide and varied music taste, so it would be unfair to pick a single song from blues to rock as a favourite"
More from Rashmee Roshan Lall
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
'Gehraiyaan'
Director:Shakun Batra
Stars:Deepika Padukone, Siddhant Chaturvedi, Ananya Panday, Dhairya Karwa
Rating: 4/5
Company profile
Name: Dukkantek
Started: January 2021
Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani
Based: UAE
Number of employees: 140
Sector: B2B Vertical SaaS(software as a service)
Investment: $5.2 million
Funding stage: Seed round
Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office
Dhadak 2
Director: Shazia Iqbal
Starring: Siddhant Chaturvedi, Triptii Dimri
Rating: 1/5
More from Neighbourhood Watch
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3EName%3A%20%3C%2Fstrong%3ESmartCrowd%0D%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3E2018%0D%3Cbr%3E%3Cstrong%3EFounder%3A%20%3C%2Fstrong%3ESiddiq%20Farid%20and%20Musfique%20Ahmed%0D%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EDubai%0D%3Cbr%3E%3Cstrong%3ESector%3A%20%3C%2Fstrong%3EFinTech%20%2F%20PropTech%0D%3Cbr%3E%3Cstrong%3EInitial%20investment%3A%20%3C%2Fstrong%3E%24650%2C000%0D%3Cbr%3E%3Cstrong%3ECurrent%20number%20of%20staff%3A%3C%2Fstrong%3E%2035%0D%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%20%3C%2Fstrong%3ESeries%20A%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EVarious%20institutional%20investors%20and%20notable%20angel%20investors%20(500%20MENA%2C%20Shurooq%2C%20Mada%2C%20Seedstar%2C%20Tricap)%3C%2Fp%3E%0A
MATCH INFO
Asian Champions League, last 16, first leg:
Al Ain 2 Al Duhail 4
Second leg:
Tuesday, Abdullah bin Khalifa Stadium, Doha. Kick off 7.30pm
Stamp duty timeline
December 2014: Former UK finance minister George Osbourne reforms stamp duty, replacing the slab system with a blended rate scheme, with the top rate increasing to 12 per cent from 10 per cent:
Up to £125,000 - 0%; £125,000 to £250,000 – 2%; £250,000 to £925,000 – 5%; £925,000 to £1.5m: 10%; Over £1.5m – 12%
April 2016: New 3% surcharge applied to any buy-to-let properties or additional homes purchased.
July 2020: Rishi Sunak unveils SDLT holiday, with no tax to pay on the first £500,000, with buyers saving up to £15,000.
March 2021: Mr Sunak decides the fate of SDLT holiday at his March 3 budget, with expectations he will extend the perk unti June.
April 2021: 2% SDLT surcharge added to property transactions made by overseas buyers.
COMPANY PROFILE
Company name: SimpliFi
Started: August 2021
Founder: Ali Sattar
Based: UAE
Industry: Finance, technology
Investors: 4DX, Rally Cap, Raed, Global Founders, Sukna and individuals
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
PREMIER LEAGUE FIXTURES
Tuesday (UAE kick-off times)
Leicester City v Brighton (9pm)
Tottenham Hotspur v West Ham United (11.15pm)
Wednesday
Manchester United v Sheffield United (9pm)
Newcastle United v Aston Villa (9pm)
Norwich City v Everton (9pm)
Wolves v Bournemouth (9pm)
Liverpool v Crystal Palace (11.15pm)
Thursday
Burnley v Watford (9pm)
Southampton v Arsenal (9pm)
Chelsea v Manchester City (11.15pm)
ESSENTIALS
The flights
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.
The specs
Engine: 6.2-litre V8
Transmission: ten-speed
Power: 420bhp
Torque: 624Nm
Price: Dh325,125
On sale: Now
Fund-raising tips for start-ups
Develop an innovative business concept
Have the ability to differentiate yourself from competitors
Put in place a business continuity plan after Covid-19
Prepare for the worst-case scenario (further lockdowns, long wait for a vaccine, etc.)
Have enough cash to stay afloat for the next 12 to 18 months
Be creative and innovative to reduce expenses
Be prepared to use Covid-19 as an opportunity for your business
* Tips from Jassim Al Marzooqi and Walid Hanna
more from Janine di Giovanni
Results
1. Mathieu van der Poel (NED) Alpecin-Fenix - 3:45:47
2. David Dekker (NED) Jumbo-Visma - same time
3. Michael Morkov (DEN) Deceuninck-QuickStep
4. Emils Liepins (LAT) Trek-Segafredo
5. Elia Viviani (ITA) Cofidis
6. Tadej Pogacar (SLO UAE Team Emirates
7. Anthony Roux (FRA) Groupama-FDJ
8. Chris Harper (AUS) Jumbo-Visma - 0:00:03
9. Joao Almeida (POR) Deceuninck-QuickStep
10. Fausto Masnada (ITA) Deceuninck-QuickStep
