After the recession of 2007, Dubai real estate sector has seen a consistent fall which halted the buying, selling and renting activities. Although the recession from the world is not over yet there are sectors which are still struggling hard to come out of it. Dubai real estate sector is still in the state of slump due to huge oversupplies. Now different stakeholders in Dubai, including government agencies, investors, expatriates and home owners, are taking different steps to get out of this slump. The rental market in Dubai is also in a distressed condition. Rental prices of properties are falling down as suppliers are unable to locate potential buyers for their properties.
In this situation the steps taken by various stakeholders to stabilize rental market are highly appraisable. Recently RERA, the official real estate regulatory authority, announced that it would update the rent index to keep the rental prices up-to-date. It is the only junction from where rents in Emirates are measured. This step will greatly help the tenants as they will be informed with the average Dubai rental values and will help in stabilizing the rent prices. The action taken by RERA was taken against the Ruler’s decree of capping the rent rate. RERA is the biggest stakeholder of Dubai property sector and controls the property market to a great extent.
Before the notice of RERA about the rent index table, there was confusion among the tenants as they were totally unaware of actual rental prices. This confusion was mainly spread by the agents and dealers who wanted to entice buyers to invest and earn commission out of it. But now as the tenants and investors have a clear view of rental prices of all societies and communities in Dubai, their confidence level is returning back on Dubai real estate sector. This entire procedure is meant to stabilize the rental price.
Owners of houses who were reluctant to rent out their properties on lower prices are now left with no other options but to follow the market rate and stop waiting for better clients. Due to oversupply of Dubai properties, it has now become very difficult for investors and expatriates to sell properties easily on high rates. So all those houses and apartments which were originally for sale are now available on rent. This has balanced the situation in favour of renting and has stabilized the rentals prices to a great extent. Besides that, banks are relaxing their lending criteria and government is also trying hard to devise stringent monetary polices that can stabilize rental prices in Dubai.
William King is the director of Dubai Property, Dubai Rent and UAE Property. He has 18 years of experience in the marketing and trading industries and has been helping retailers and startups with their product sourcing, promotion, marketing and supply chain requirements.