As the UAE continues to experience a property boom, coupled with an influx of international tourists and investors, tenants are facing challenges in sourcing affordable apartments and villas in the country.
One of the main challenges is the limited supply of available units, despite the increased number of properties that have been completed.
In the third quarter of this year, 6,000 apartments were completed, while nearly 800 villas were added in the first six months in Dubai.
However, demand is far outstripping this, driving rental prices higher in the third quarter, with average apartment and villa rents experiencing a quarterly increase of 4 per cent and 5 per cent in Dubai, respectively.
We recorded an average year-on-year rent increase of 27 per cent in Dubai in comparison with September 2021.
For example, a two-bedroom apartment in Dubai Marina with an annual rent of Dh170,000 ($46,280) in 2021 will now cost about Dh250,000 to rent in 2022.
Meanwhile, a five-bedroom villa in Marina Gate 1 was rented for an annual rent of Dh1 million.
To secure the ideal home, a quick response time is key and tenants need to act swiftly if they find an apartment or villa attractive.
Amid limited supply, several potential tenants viewing the same unit can drive properties above the asking price.
Tenants must ensure they have all the appropriate documents in order and are prepared to sign the contract and hand over security deposits or postdated cheques to lock in the rental.
Tenants should also plan ahead and look for properties a few months in advance before they are vacant and listed on the market.
One way tenants can simplify this process is to register with a real estate broker certified by the Real Estate Regulatory Agency rather than deal with multiple brokers.
Tenants who enlist multiple brokers can risk distorting the market as these agents may approach the same landlord, driving up rental prices.
By registering with one broker, tenants can build a good relationship with them and have a clear idea of what they are looking for in the market.
Bargaining for rents in today’s market can be very challenging.
However, one way tenants can ensure they are receiving the best deal is to make the payment as quickly as possible.
While this isn’t always possible, landlords prefer the quickest form of payment, and fewer the number of cheques, the better.
Dubai apartment prices — November 2022
Tenants who pay with multiple cheques will end up paying higher rent — sometimes even over the asking price.
When choosing to rent, tenants should also understand the market before deciding which community is best for them.
Lifestyle preferences may be a deciding factor as rents fluctuate based on the property’s location and proximity to leisure, entertainment and commercial hubs.
Tenants must also include a margin for price appreciation or depreciation in their decision-making process.
Factor in the possibility of rent hikes as landlords are entitled to increase the rent annually by 5 per cent to 20 per cent during renewal of the tenancy contract, provided tenants receive a 90-day notice period.
Tenants in Dubai can use the Rera calculator to determine if a rent increase is applicable or not, based on tenancy contract expiry, location, type of property, community and size of the property.
Watch: Lockdown fuels a Dubai property-search boom
During lease renewal, if tenants feel they are being asked for an unfair rent in comparison with comparable apartments in the community, they can approach their landlord and inform them of the same.
Should a disagreement arise on the stipulated rent, the tenant can file a complaint with the Rental Dispute Settlement Centre to decide a fair rent payable in accordance with Article 13 of the amended Dubai tenancy law.
The Dubai rental market is growing exponentially. We recorded a 35 per cent annual increase in rents in the third quarter of 2022, and this is expected to rise further as we head into the new year.
The UAE ranked in the top 25 countries for global talent in the recent Global Talent Competitiveness Index by graduate business school Insead.
With global events under way, such as the World Cup in Qatar and the introduction of new visa schemes for expatriates, the impact will be experienced across the region — including the UAE.
This will put GCC markets in the global spotlight and attract an influx of potential residents for the foreseeable future.
Emma Main is head of leasing at Espace Real Estate