The Changing Face of the Dubai Property Market Presents New Opportunities for Tenants
The Changing Face of the Dubai Property Market Presents New Opportunities for Tenants
The past few months have seen considerable changes in the Dubai property market, as global conditions have impacted on real estate market in the emirate. Whilst this has undoubtedly had a considerable and negative impact on off-plan property, the market for property to rent in Dubai is flourishing.
This rapid expansion in the market for rental property in Dubai has been brought about by a combination of factors, which has resulted in the end user (the tenant) being offered a wider offering then ever before. More choice and better prices have resulted in a shift of power over to the tenant, a trend which seems set to continue as the market for property in Dubai moves towards maturity.
So what are these factors, and why are they causing to a shift to tenant empowerment?
Firstly, more property is coming online, and despite the well publicised construction delays, it seems likely that this trend will continue apace for the foreseeable future. A quick browse through many of the Dubai rental property websites will show the rental property still as a computer generated image (CGI), or even the development under construction. Not an ideal scenario, for either the prospective tenant, or the landlord, however the requirement for monetising the property is such that property is being marketed as soon as it is available.
In the past, a distinct imbalance has existed between the amount of available rental property in Dubai, and a rapidly increasing demand. As more apartments and villas become available on the rental market, the market will shift towards a natural, and more long-term equilibrium price.
Secondly, the authorities have made a number of legislative changes in recent times, aimed at protecting the rights of the tenant, something which was not previously in place in Dubai. These legislative efforts by federal entities such as the Real Estate Regulatory Authority (RERA) and the Dubai Municipality Rent Committee are primarily aimed at protecting the rights of the tenant, ensuring that access to the real estate market in Dubai is as wide as possible.
The final reason for the increasing market for rental property in Dubai is due to an increasing requirement of the landlord to monetise the property on a consistent basis through rental revenue. Despite the recent turbulence in the property sector, Dubai is still a strong real estate market in the long term. Increasing numbers of people are still chosing to make Dubai their permanent home, whilst tourist revenues in the region continue to grow at almost unparalleled levels.
In previous years, many landlords would rely predominantly on capital appreciation to ensure long term returns, but as the estimated levels of capital appreciation have slowly decreased, the importance of rental revenue has increased considerably.
Given the above factors, coupled with the increasing size of the market of rental property in Dubai, it seems likely that this transition of influence towards the tenant will continue, as landlords and real estate companies look to capitalise on what is a rapidly increasing market sector.
Mark Burns is a Partner at Property-Dubai.tv, a Dubai real estate specialist offering a wide range of property to rent in Dubai.
