DUBAI // Steadily falling rents across Dubai are spurring a population shift to residential developments in the city that were considered unaffordable less than a year ago, property analysts and residents say. Residents who had opted for inexpensive housing in areas such as Dubai’s International City, Sharjah and even Al Ain are now moving to Dubai Marina and other central areas. Families in two-bedroom flats are searching for three- and four-bedroom villas in upmarket places such as Umm Suqeim and The Springs.What makes this article so timely? Well, some of you may remember that about 11 and a half months ago, I moved to that place called International City for exactly the reason mentioned in the article: sticker shock. International City was cheap (relatively speaking.) And, as the article says, I am looking to upgrade and I have to say, the Marina is up there on my list of favorites!
Photo credit: Dubai Marina, which has suddenly become affordable for residents who had been forced to live outside the city. Paulo Vecina / The National
The shift represents an effective reversal of nearly a decade of climbing rents that drove people in search of inexpensive housing to the outskirts of Dubai and into neighbouring emirates.“This is the ultimate flight to quality,” said Blair Hagkull, the Middle East and North Africa managing director for Jones Lang LaSalle, an international commercial property firm.“Before, as things became more expensive, people tended to move further out. But as things become more affordable, people start to have choice and choice is a very powerful motivator. When you’re talking about real estate it’s not just a commodity; it is where people live, work and play and ultimately it’s central to their lives.”
According to Landmark Advisory, a property consultancy firm, rents have fallen significantly in all categories. Deflating prices are also bringing about a change in the bargaining power between landlords and tenants, said Jesse Downs, the head of research at Landmark Advisory. Whereas landlords could demand a full year’s rent eight months ago, tenants are now paying month to month and asking for extra clauses such as 60-day lease terminations.
There is also speculation that rents could fall further as waves of families move back to their home countries after the school year. “It’s hard to quantify it right now,” Ms Downs said, “but my feeling is that in July there will be additional downwards price pressure as schools let out and families make that decision to go home.” The prospect for further declines is already persuading some landlords to take their properties off the market, she said.
Just after I returned from my trip to California, I received a call from my land (slum?) lord. In fact I was still in the Airport when he called. We had a conversation that went something like this:
SL: Are you going to renew the lease for the place at which you are staying?
Me: I'm not sure, I just returned from vacation so I will have to get back to you.
SL: When? You were supposed to give two months' notice if you wanted to renew!
This was news to me. To the best of my recollection my agreement expired beginning of May which was a little over a month away. I resurrected the lease, no such clause. I Googled Dubai tenancy laws, nothing there either. I would say he is full of BS but others people have said the same thing as him so I'm really not sure.
Now, the laws here with respect to rental increases have been the subject of much discussion and debate and they have flip-flopped a few times. They are nothing short of vague and for the most part, they do not favor the tenant. In searching online, several "directives" have been issued by the powers that be. Directives are not exactly laws, more like "suggestions" of what a law should be.Me: What are the terms of the renewal?
SL: (confused) Huh?
Me: How much is the rent?
SL: (still confused) Well, I am raising the rent (like duh!) But for you I will raise it ... say 5000 Dirhams. Only 5000 Dirhams. Just for you.
As of late last year, there is a governing body which oversees real estate called the, "Real Estate Regulatory Authority"; RERA for short. The existence of RERA has managed to bring some sanity to the rental market and has started to rein in the free-wheeling landlords. RERA even have a handy-dandy online "rental increase calculator" to find out if you are subject to an increase! The unfortunate part is that under the relevant "decree" from those same powers that be, until a rule is published in the official gazette, it may not be considered “effective.” Again, a law that is not really a law. The waters get even muddier. But in my research on Dubai rental laws/rules/directives/whatever happens to be in effect at the moment, no where did I see anything to suggeste that his generous offer to raise the rent by "only" 5000 dirhams ($1648CDN) per year was legal.
Irrespective of laws (or lack there of), one can never ignore the forces of the free market. More than likely, my landlord is fully aware of the new market but me thinks he's playing dumb to see how much I know.
The conversation continues:
OK, I didn't really say that last part (with my outside voice) and in reality, I had made the decision to move elsewhere long before he called to ask about renewal. International City was a good start for me here: it was affordable and the suite was partially furnished. Those were the "pros". Now for the "cons" since I have been here a while:Me: how many cheques are you asking for?
SL: (still confused and now audibly irked) One!
Me: SEE ya! Wouldn't wanna BEE ya!
Smelly outside.
Smelly inside.
Remote location and virtually no amenities.
No hot water. Luke-warm? Yes, Hot? No.
Perpeturally stopped up sinks and plugged toilets (... and no, it nothing to do with the fiber in my diet!)
The orange couch (and matching drapes).
Did I mention that it is smelly outside? ... and inside?
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