Rent prices are soaring by more than 36% in some regions of Dubai, with more landlords in high-demand areas demanding far more than the official rental index from their existing tenants. Rents on the Palm Jumeirah and Dubai Marina have increased by 36 per cent and 34 per cent, respectively, year over year. In addition, residents at Jumeirah Park are now paying 25% more, while prices at The Greens and The Views have both increased by 24%. In addition, the Lakes have had a more than expected price increase of 21%.
Tenants are turning to the Rental Disputes Settlement Centre at the Dubai Land Department as an only option when faced with out-of-turn rental increases. They also want their landlords to adhere to the RERA rental index’s range-bound rental hikes.
Rental increases in Dubai’s residential property market is picking up some serious speed, with more landlords starting to demand well above the official rental index from their existing tenants in high-demand locations#dubaiproperty@Land_Department https://t.co/8Pd56916cw
— Gulf News Business (@GulfNewsBiz) May 18, 2022
For the previous five years, the Dubai rental market has been quite quiet. However, starting the second half of 2021, prices have risen significantly, with prices increasing across the line. The good news for renters is that prices are still lower than they were in 2014. “We are seeing many tenants trying to find support from the rental index to avoid sharp rises landlords are asking for renewals,” said the latest update from the real estate consultancy Core. “New leases are driven by market conditions with many landlords, particularly of units in sought-after buildings and districts achieving their asking prices.
The RERA rental index shows a wide variety of current rates in some of Dubai’s most popular neighbourhoods. There are also specific percentage bands that landlords must adhere to if they intend to raise rents. As per market sources, the current demand for leased residences is significantly higher than the five-year norm.
“This demand is not just from existing residents shifting to new homes, like what happened in last 2020 and early 2021,” said the head of brokerage services at a leading property firm. “This increase is fuelled in large part by newcomers who are taking up residency in the country. This will become more apparent in Dubai’s residential rental space like it did in the freehold sales.” As a result, the rent index numbers may need to be updated soon.
Outside of the Palm and Jumeirah Park villas, Dubai Marina (34%) and The Greens and The Views (34%) have seen similar rent rises (both by 24 per cent). The rental hikes that renters at the Palm apartments are facing are rather steep – 34% higher than in March 2021. “It will soon reach a point where it may be cheaper in the longer term to move into a new home rather than pay the higher rent on the current,” said a broker. “At least, moving to a new home ensures no rent increases for two years.”