DUBAI // Steadily falling rents across Dubai are spurring a population shift to residential developments in the city that were considered unaffordable less than a year ago, property analysts and residents say. Residents who had opted for inexpensive housing in areas such as Dubai's International City, Sharjah and even Al Ain are now moving to Dubai Marina and other central areas. Families in two-bedroom flats are searching for three- and four-bedroom villas in upmarket places such as Umm Suqeim and The Springs.
The shift represents an effective reversal of nearly a decade of climbing rents that drove people in search of inexpensive housing to the outskirts of Dubai and into neighbouring emirates. "This is the ultimate flight to quality," said Blair Hagkull, the Middle East and North Africa managing director for Jones Lang LaSalle, an international commercial property firm. "Before, as things became more expensive, people tended to move further out. But as things become more affordable, people start to have choice and choice is a very powerful motivator. When you're talking about real estate it's not just a commodity; it is where people live, work and play and ultimately it's central to their lives."
According to Landmark Advisory, a property consultancy firm, rents have fallen significantly in all categories. Deflating prices are also bringing about a change in the bargaining power between landlords and tenants, said Jesse Downs, the head of research at Landmark Advisory. Whereas landlords could demand a full year's rent eight months ago, tenants are now paying month to month and asking for extra clauses such as 60-day lease terminations.
There is also speculation that rents could fall further as waves of families move back to their home countries after the school year. "It's hard to quantify it right now," Ms Downs said, "but my feeling is that in July there will be additional downwards price pressure as schools let out and families make that decision to go home." The prospect for further declines is already persuading some landlords to take their properties off the market, she said.
hnaylor@thenational.ae
