August 26, 2015
Dubai.. Land of Dreams and opportunities comes with no easy stay. Being an NRI, living in Dubai might bring you the pride and might show case you, as a star in the worlds eye, But, the reality is different. Dubai rents have been the most volatile as compared to any other part of the world. Dubai rents are one of the major concerns for the dreamers who migrate from India and other parts ,with a dream to live in one of the posh and happening cities of the world. But it comes with a heavy price !
Expat families shell out a direct 40% of their salary as a rental cheque and have to face an increase in rent every year from 5 to 10 percent. Not to be astonished, lets face the reality !
Shared accommodations between the families are illegal, Annual rental contract is a mandatory document to get one’s Residents Visa renewed, or else visa renewal is at stake if you don’t have one.
Family with working couple, who aspire to make some savings, knows very well that, its possible only if both works ,where one income goes for savings and the other to spend on living.
Bachelors manage a sharing accommodation, though considered illegal, But, most of them live under one roof with common kitchen and baths in one rented apartments shelling out around 2000 AED per month.
2014 was the year of revolution in Dubai Real Estate. The house pricing started to grow and gradually leaving the expats a breath taking experience.
It grew rapidly too fast to a greater heights in the residential market. Annual rent increase was about 11% in the area of international city and Jumeriah lake towers during the first quarter of the year according to Asteco.
Expats always showed the culture of moving to other emirates, as soon as the rental heat waves hit them, and the most preferred and immediate neighbor emirate is Sharjah.
And then on ,move further to Ajman only, if they can afford to live in Ajman and commute to work in Dubai. This has been the case over the years as and when the rents in Dubai went up.
Increase in demand made the developers to get active within no time and to launch new projects.
Dubai’s largest listed developer, Emaar Properties, started the year launching one project every week to catch the opportunity of booming demand, and it was joined by others including Dubai Properties, Damac, Nakheel and Tecom.
Developers offering many new off-plan properties with an easy and relaxed payment plans which required just a 20 percent deposit and the rest to be paid upon completion in 3- 4 years was quite attraction for a blue collared expatriates.
Rising in rents and demand did not leave the Capital City of UAE Abu Dhabi non responsive.
Developer Aldar announced its first new project launches since before the downturn at the emirate’s Cityscape exhibition, As per the news “Later in the year the tourism developer TDIC released a new phase of villas on Saadiyat Island in the capital, while JLL reported that for the first time in six years the stagnant Abu Dhabi office market was showing signs of rent rises (albeit prompted by the fact that half of Mubadala’s massive Sowwah Square office block had been taken off the market while the landlord waited for the city’s new financial free zone authority to decide on the new rules governing the area) ” By the summer Ajman too had picked up as, the Sharjah was getting expensive too , most of the expats started to relocate .
In August, amid slowing growth for rents and prices, and a steep decline in sales volumes, brokers started to warn that prices in Dubai could be starting to fall as mortgage caps, introduced by the Central Bank at the end of last year, started to bite.
We are certainly seeing a softening in the market for villas over Dh5 million, said Catherine Clarke, a director in residential valuations in Colliers’s Dubai office. The mortgage cap has certainly hit those properties. You’re looking at a down payment of 35 per cent plus additional fees on transactions.
I would anticipate a slight softening going into the future for this segment of the market. It’s too early to tell whether this means real price falls or not.
Rents too were starting to fall, according to the experts, with CBRE reporting that after 10 consecutive quarters of growth, average residential rents fell 1 per cent in the third quarter.
The softening market did little to dent enthusiasm for Dubai’s Cityscape exhibition, at which the number of companies showcasing property increased by a quarter on the previous year, making it the largest for the past five years.
There were lots of big announcements too. Dubai Holdings announced that it would start construction of the long-awaited Mall of the World project by next March; Meydan said it would build a pilots’ village as part of the second phase of its Dh21bn Mohammed Bin Rashid City scheme; and Meraas unveiled plans for a 9.5 million-square-foot La Mer beachfront tourism development close to Palm Jumeirah.
Developers such as Danube, Deyaar and Sharjah’s Al Thuriah came up with projects targeting the lower income expats and started to show case their attractive projects.
Abu Dhabi,revoked the rule limiting the rent rises from the current existing tenants to 5 percent a year brings in the fear of rapid raise in the rents again making it very hard for ordinary people to afford to live here.
We’re getting concerned again about housing rents, says William Neill, the director and head of Cluttons’s Abu Dhabi office. Expatraits, live in the hope that, next year rent does not increase, and emerging questions thats rises very often, is to invest in the low budget projects with easy and relaxed payment or not.
Though gathers some strength with great difficulty ,builds up the courage to own their own flat, but hesistant to take a decsion as future is so uncertain with, will his or her job is secured ?
What if they move back to their respective country due to unavoidable circumstance ?
Always trying to find that courage expat who has stepped in to it and stood firm ! Life moves on with these ncertainties..
so its Live in Dubai or Leave Dubai a constant question arises now andthen ….
This article written & compiled from various sources by Champaka Rajesh, Managing Director, Zemooz Inc.
