Dubai Rents To Fall (In 5 Years)

Finally, there is news that rents will start to fall in Dubai, you will just have to wait five years though.  Latest speculation on the state of the Dubai real estate rental market is that the supply and demand will eventually even out, to the benefit of residents that pay huge amounts in rental costs, but this will not take place for another five years. 

As all residents know, the freehold market is currently busy with projects that are expected to be completed across the next few years, but nothing is expected to be complete this year apart from the Dubai Mall at Downtown Dubai.  All major projects have dates around 2010 onwards for completion, and once a large amount of property is finally available for residents to move in, combined with new rental properties built between now and then, soon we could see a fall in prices.

The news that prices may fall is a welcome bit of information for all residents of Dubai properties, even if it is seen at 5 years away.  Rental prices have shot up over the past couple of years, and this year alone rental prices have increased by over 20%.  The sudden inflation in accommodation has taken its toll on all income groups in Dubai, with the hardest hit being the low income families.  Renting a villa is a huge cost to residents, and most are now paying over 50% of their annual income just in irrecoverable rental costs. 

Construction costs and the increasing numbers of workers coming from overseas are seen as contributing factors to the price hikes and the continuation of the Dubai property boom, however, numerous construction delays have also been a significant cause of inflation.  Dubai is now well-established as an international city, and this has pushed prices up, particularly in real estate.  The freehold property sector offers an alternative to renting; however, the costs of buying a home are now also very high.  For most Dubai residents, it will just be a wait for 5 years, and this cannot come soon enough for most.
 

Looking to buy or sell Dubai property? We assist hundreds of clients every year and offer proffessional advice on all aspects of buying and selling Dubai real estate.

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