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Dubai rents stabilize
After suffering years of soaring rents, Dubai residents are given respite with the news that prices are slowing
January 12, 2009 10:29 by Dana El Baltaji
We’ve been watching rents rise for years, wondering when the market will, if ever stabilize. According The National, it’s finally happened. A report published by Asteco claims that rents in Dubai did not rise in the last three months of 2008, rising a mere four percent in the whole of 2008.
“Certainly for the next three to nine months I don’t think there will be anything that will cause a move back to rapid inflation,” Andrew Chambers, managing director, Asteco said to The National.
Rental prices in 2007 and 2006 rose approximately 100 percent per year, in spite of the government enforced annual rental cap of 15 and 5 percent respectively. For many residents, the hassle and costs of taking landlords to court for disregarding the rental caps were too high, and opted to move out of their accommodations instead.
Today, however, an increase in housing units in the market and a slowdown in the economy means that landlord can no longer expect tenants to pay inflated rents, especially given that a market correction is imminent. Furthermore, landlords are now offering tenants flexible payments options, which is a significant shift in attitude on their part.
Whether rents will fall, however, is a different matter. Until at least the end of the first quarter of 2009, very few (with the exception of those in the inner circle) will know how severely Dubai’s property sector will correct itself.
But what is certain is that with the Real Estate Regulatory Agency’s (Rera) soon-to-be-published price index, and the market’s correction, Dubai will inevitably seem less like an investor’s playground, and more like a sustainable city.