Keeping it real (estate)
From the drop in rental prices, to the emergence of new contractual trends, Kipp takes a look at recent developments in the property sector of the UAE
October 3, 2010 3:25 by Eva Fernandes
Residents shift from Sharjah as Dubai rents drop:
As rents in Dubai drop lower and lower, residents from the neighboring Emirate of Sharjah are increasingly relocating to the recently more affordable homes in Dubai.
As a result, Ahmad Mohammad Al Midfa, Chairman of the Sharjah Chamber of Commerce and Industry (SCCI), says rents in Sharjah have dropped by 15 percent, although he says “prime locations” in Sharjah such as Buheira “were not badly affected”.
And as residents relocate from Sharjah, economic analyst Mohammad Al Asoomi told Gulf News that “more people from Ajman and Umm Al Quwain are relocating to Sharjah for the cheaper rates and the proximity to their work in Dubai.” The question is, what happens to businesses and rents in Ajman and Umm Al Quwain.
Short term lets becoming more common:
As the rents drop in Dubai, landlords are offering innovative and more appealing contracts to their potential tenants. One of the more common trends emerging amongst Dubai landlords is the concept of ‘short term lets.’
Short-term lets, a concept borrowed from the hospitality industry, provides tenants with a fully furnished apartment for rent for a few days or a few months. Although short-term lets are essentially more expensive than long-term contracts, it is ideal for new residents of the UAE, who do not have bank accounts, cheque books or residency visas; articles that are required for the documentation process of long-term contracts. In such situations, short term lets prove to be a less expensive option than residing in a hotel.
Jesse Downs, director of Landmark Advisory, links the emergence of this trend to the signs that the economy is beginning to pick up slightly. Speaking to Gulf News, Downs said, “When we are in a period of job growth and economic expansion, more business travelers and new residents come to the UAE and rent out these units.”
Abu Dhabi Island residents relocate to more affordable options:
The trend of the increase of housing supply is not limited to Dubai alone, for similar occurrences can be observed in its southern neighbor, Abu Dhabi. Property services firm Asteco has noted that more residents are moving from Abu Dhabi Island villas to the mainland in search of cheaper rent as a result of new housing supply available on the market.
Elaine Jones, the chief executive of Asteco Property Management, said “With increasingly more supply delivered on the mainland, we are starting to see a population shift from the traditional areas of the Abu Dhabi main island towards the mainland that offers better value for money options, especially in terms of villa developments.”
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