The two extremes of the rental market cycle will have been experienced by Dubai residents who have lived for at least ten years. Apartments for rent in Dubai have been fluctuating until 2020.
Since 2008, Dubai's real estate market, like any market, has seen ups and downs due to shifts in the global economy.
Long-term tenants may have discovered that they were paying nearly half the annual rent at some point in time compared to the earlier years as a result.
Because of the economy's and workforce's fast expansion, rental rates were substantially higher in 2008 than they are now. However, the global financial crisis caused rents to plummet in 2009, and they continued to do so until 2012 when a rebound started to take hold. Apartments for rent in Dubai increased gradually.
When Dubai was chosen to host Expo 2020 in 2013, market confidence increased once more. It peaked in 2014 before the start of a downturn was signalled by a combination of low oil prices and a strong US currency.
As more supply continued to outstrip demand, rental prices gradually decreased over the ensuing years. Along with this, the emirate began to spread out into the desert and away from Sheikh Zayed Road, its main road.
In the current market, tenants are more in control since landlords offer incentives like numerous cheque payments, no commission, or the inclusion of utility expenses to entice and retain tenants.
No industry is completely immune to the effects of the market. However, some stand out when compared to others due to rates that have returned to levels that are comparable to, or even lower than, those that were paid back in 2010 or 2011.
For instance, data from the reputed property services business shows that the average price of a one-bedroom flat in Dubai Marina was Dh130,000 in 2008 before dropping to Dh63,000 in 2011. By the end of 2019, rents in the neighbourhood had dropped to an average of Dh58,000. In later years, they had reached as high as Dh113,000.
A five-bedroom property on Palm Jumeirah would rent for an average of Dh450,000 in 2009 and 2010, but by 2014, that price had risen to as much as Dh725,000. By the end of last year, it had fallen back to Dh440,000.
Rents will continue to shrink, but perhaps more slowly, according to the widespread agreement among real estate companies.
According to a new Property Finder Dubai Trends analysis, apartments for rent in Dubai rents decreased on average by 2.4% in the second half of 2019.
The report continued, "Landlords are having to be flexible to attract and maintain tenants since demand has not been able to keep up with handovers."
Despite this, where there was a considerable volume of new unit deliveries, rents decreased dramatically in places like Dubai Sports City (by 10%), Town Square (by 10.8%), and Jumeirah Village Triangle (by 13.8%).
As projects begun a few years ago when the market was more buoyant are finished, Savills anticipates 40,000 new apartments for rent in Dubai this year.
Inside a Dh65 million Dubai home known as "The White House" on the Palm Jumeirah
In over a decade, Damac Properties declares its first full-year loss due to decreasing revenue.
A further successful year for tenants is anticipated, according to Luxhabitat's luxury sales director Andrew Cleator, who also predicted that "this year we should see the larger conglomerate developers focus more on their under construction master communities with units still in the pipeline; Dubai Hills Estate and Dubai Creek Harbour, to name a couple."
"As a result, families will be able to migrate to locations that were earlier considered out of their price range. This includes homes in better neighbourhoods with more bedrooms and better services.
Nevertheless, many claimed that the UAE continues to give landlords respectable profits in the long-term market, with "popular communities delivering returns of between 6 percent and 9.5 percent." Cities around the world with low rates of production include London and Hong Kong.
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