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Thursday, 12 December 2019
Cheaper rents for Dubai residents
Wednesday, 01 April 2009


Dubai's property watchdog on Wednesday said its new rental index , due out later this month, will include lower rental values to better represent the current slowdown in the market.

The Real Estate Regulatory Authority (Rera) renewed its pledge to publish an updated index in April following reports earlier this week suggesting the new index could be delayed until the summer, UAE daily The National reported.

In a statement Mohammed Khalifa bin Hammad, the director of Real Estate Relationship Regulation at Rera, said the index was being updated as a result of data collected through the online rental contract registration programme.

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"The new update of the rental index will be released in April. What has been noted from the first rental index is an average price change of between 10-15 per cent," said bin Hammad.

Rera also confirmed it would update the list every few months to keep in touch with future market fluctuations.

It added that reports claiming Rera had delayed issuing the new figures because of a hold-up in gathering data were “entirely false” and based on information from ''an unknown individual allegedly working for Rera,'' The National reported.

The news comes barely 24 hours after a Rera official said an updated rental index would not necessarily be based on new rental values in the emirate after all.

Karim Awwad, an official at the authority, was quoted as saying "We are not making any changes to the existing figures; we are just going to be updating the areas that were not mentioned in the last index.

''We will be conducting a new survey in summer of this year."

The comments were published by AME Info on Tuesday.

The latest statement from Rera reconfirms its stance in February when it indicated that the index would be updated and re-released in April following concerns it was based on unrealistic rental values taken during the boom of summer 2008.

Rents have fallen from last year's peak and will likely drop 20 percent+ this year.


 
Comments (19)

Sham
Posted by AH on 30 April 2009 at 10:56 UAE time

RERA is nothing but a conduit of the government.

They did nothing when rents went up exhorbitantly and are now trying to support property prices by putting a floor on the decline of rentals. Good rentals = good property prices, since most investors look at rental yields while determining property prices.

The market drove prices higher, the market will drive them lower. A real estate regulatory authority has seldom been able to govern market conditions.
well done RERA
Posted by p, dubai, uae on 30 April 2009 at 09:44 UAE time

thanks to RERA, middle class people like many of us can now afford to live in comfortable spacious homes at reasonable rents, earlier the rents were ridiculoous with no logic on location or dimension, this kind of streamlines the process and gives logical reasoning for the figures.
RERA
Posted by Waleed, Dubai, UAE on 30 April 2009 at 08:48 UAE time

Firstly, today is the last day of the month.

Secondly, I renegotiated my rent with around a 20% decrease for a 2 bedroom in AlBarsha. My comment is that even now, it is still too high, especially given the economic circumstances.
Rents should have gone down by at least 50% due to the fact that they were way over inflated, just like the price of oil at $150 a bl.
Wake up and start dealing with reality is my advice.
Unrealistic Rents
Posted by Dude, Dubai, United Arab Emirates on 30 April 2009 at 04:52 UAE time

This rent index shows that RERA is still far away from reality, thought it is one step in the right direction. One of the real estate consulting firms in Dubai published around 1 month ago a report presenting a major differences between the rents published by RERA in the previous index and what they have found actually in the market. Example 2 bedrooms in Palm Jummeriah went down from 210,000 down to 140,000 and same in Dubai marina from 140,000 down to around 75,000-80,000.

The interesting part that they stated that even with such drop in rents the demand was not stimulated enough because of several reasons (no one is coming to the city, people already living don't feel that they have secured jobs so they wont make a move, Sharijah rents are on free fall coupled with far less congested roads between Dubai and Sharijah is making people more welling/ready to make the move further north and drive....etc)

What this index lacks is the following: the building age (you won't buy a used car at the same price of a new one), the service offered by landlord (maintenance, parking, electricity...etc) and either included or not included in the rent contract and many other factors that may contributes to the total cost of rent (direct, indirect, hidden costs, declared costs...etc).

Unfortunately I don't see a move from the RERA side to get down and increase the city competitiveness for people and business to come and work or at least stay in Dubai. They don't go and check the jobs boards and they don't speak to recruiters to see what companies are doing right now: shifting people outside the city to other locations where the allowances will be sufficient for their employees to get accommodations which is far larger in area space and equal in quality to what Dubai is offering. Many companies are changing their operating models from regional offices serving the entire region to local country offices dedicated to each country because for them they will bring down the cost of operations, be closer to their customers, increase the satisfactions of their employees with what they are getting.

Even for the ones decided to stay in the city and continue operating as a regional offices with coverage for entire region are taking measures to bring down the operating costs. One multinational which I have seen internal communications asking their staff to accept between 2.5% to 5% depending on the job grade voluntary reduction in salary so they bring down the operating costs and save jobs.

Even in Abu Dhabi which witnessed some wild rents during the past period is easing up.... villas went down from 400,000 to 200,000 so it is much less hassle for the ones who work in Abu Dhabi and able to pay such rent to stay in Abu Dhabi and save the daily 220 km round trip to office.

So where is RERA from these factors that are affecting Dubai significantly? Not any where in sync... unfortunately and sadly
To Trudy Mettler
Posted by Obelix, Dubai, UAE on 5 April 2009 at 09:58 UAE time

Stop complaining about the Gardens.If you've been there for long, you've had it pretty good for the last 3-4 years while the rest of Dubai was suffering with rents shooting through the roof.
A suggestion to RERA
Posted by Hossam, Dubai, UAE on 4 April 2009 at 16:40 UAE time

In order to make your life easier RERA and also to cover both low , medium and high classes . I suggest you put divide Dubai into regions of high , medium and low class ( could be based on how old is the building ) and set the index only for the high ones or high and medium and the rest will follow them . Example , if Im an owner of a 1 bedroom in Greens and Im renting it for 100K while my neighbor is renting it for 60K then sure I won't get a customer and I will have to decrease my rent .

my 2 dirhams
Landlord protection
Posted by MAK, Riyadh, Saudi Arabia on 4 April 2009 at 03:19 UAE time

I am wondering if like in the last few years in Dubai where the tenant was being protected by the Govt against rental increase by placing rent increase ceilings, will the landlord be protected against rental decreases through a rent decrease flooring? So what was the trend...10% and then the following year 5% ? That's fair, isn't it?
What about rental index for Commercial establishments
Posted by Nargis, Dubai, UAE on 3 April 2009 at 16:06 UAE time

I am curious about the rental index for commercial establishments. It is not unknown for Private Villas to be coverted into commercial properties with the permission of Dubai Municipality. Does the same rental index apply to those villas that are now converted into commercial establishments? It would be good to know if there is a difference.
It would also be useful information to get a rental index per square foot for commercial properties in different areas. At the moment a commercial property in Mirdif is more expensive (per sq. ft) than one on Sheikh Zayed Road.
The Gardens
Posted by Trudy Mettler, Dubai, UAE on 2 April 2009 at 18:34 UAE time

Rents down, no no no. The Gardens will increase the rent per 1.6.09. We have to pay rents same as in the Discovery Gardens. The rent increase will be very high. More than 20%. Why??? Only about the RERA. The flats are very simple and do not have extras. No store room, nothing. It is not right. I think in the RERA sitting only rich people and do not think about the middle and lower class.
Cheaper rents???
Posted by Lloyd, Dubai, UAE on 2 April 2009 at 18:33 UAE time

I hope this will materialize. But the flats where my colleagues are staying, the rents increased, not to mention the very high housing fee that is part of DEWA charges. Same thing here in our flat. All of us are staying in Deira & the increasing house rents is our main problem. Thanks.
This is unbeleivable
Posted by prasad kudva on 2 April 2009 at 11:38 UAE time

Absolutely there has been no decrease in rentals of studio flats in Burdubai. My tenancy contract was renewed on 28 March 2009 with an increase of about 10% per year, compared to the previous year. There are several unoccupied studio flats in the building where i live, which are never rented out on lower rents but rather kept unrented and unoccupied for over three months now.
Areas not covered
Posted by JTBB, Dubai on 2 April 2009 at 11:31 UAE time

I agree with "huh"?
No apartment references have been provided for Jumeirah and Umm Suqeim. This is sloppy on RERA's part. I am hoping this will be addressed in the upcoming index.
Rental Rates
Posted by Fred, Dubai, UAE on 2 April 2009 at 10:07 UAE time

Why do we need this index, it only follows what is happening in the market. As always, the market will dictate, if the rent is too high, landlords will have to wait unless they adjust rents to peoples ability to pay.
rent fall
Posted by John, Dubai, United Arab Emirates on 2 April 2009 at 10:07 UAE time

The rent of residential apartments has fallen down up to 50%. But this change can be enjoyed only if one moves into a new apartment. No one gets the rent reduced as long as she/he keeps on staying in the same place. So prepare to move and get the advantage.
Reality Free Zone
Posted by Toby, Dubai, United Arab Emirates on 2 April 2009 at 09:29 UAE time

Rents are falling eh? Not in my world!
In Media City our rent has risen by 25% by increasing the actual rent by 14% and the service charge by 300%. When asked how they could do this they simply said that they were a Free Zone so the rules of the country do not apply to them.
Not surprisingly, I have seen people moving out several times a week, so by the end of June this place should be quite empty!
I was taught that you look after your customers, sorry "partners", during a recession so that they repay you in the good times with everlasting loyalty and revenue. Seems that DMC will be repaid with the same coin!
On the home front Nakheel are doing the same thing, no actual figures yet but a 20% increase has been mentioned. Expect lots of removals vans to visit Nakheel compounds in the coming months.
Finish this phrase guys: 50% of something is something, 100% of nothing is ......
While you figure that out, I am voting with my feet, I am calling the removals company too.
Still greed for money
Posted by Wilfred, Dubai, India on 2 April 2009 at 09:10 UAE time

Even in this stage oweners are greedy for money. Any person with humanity will understand the situation. This nation is built by the expatriates and the hard working expatriates have to vacate from here with pain and with bad feelings. The future generation will never choose UAE if the authorities don't consider them. The Middle man, real estate people have done lot of money so far and because of them people still struggle to get flats. People own the flats and have sublet to other for more rent. (Specially Karama). I have seen people live in Sharjah owning flats in Karama and have subleted for five times more than the actual rent
Rent index does not cover every neighborhood
Posted by huh?, Dubai, UAE on 2 April 2009 at 08:25 UAE time

I am curious - does anyone know what the implication is if my neighborhood is not covered in the rent index. The index for apartments does not cover Umm Sequim, so does that mena I shouldn't be charged rent at all?
Rental going down in Dubai is still a farce
Posted by Linda Siew, Dubai, UAE on 2 April 2009 at 08:12 UAE time

As far as I can see, companies are asking employees to accept salary cuts, school fees is rising by the day, no change in cost of living and I still cant afford a 2 bed aparment in Dubai on 2 salaries with all the other costs rising and with less money in hand as salary. Surely landlords need to accept reality and accept that we cant afford rental costs like before - whats the point of paying over a 100K in rent and making your family starve?
GO STRAIGHT TO THE POINT
Posted by SEB, Dubai, UAE on 2 April 2009 at 07:40 UAE time

Why can't they just say what was intended right from the beginning instead of having to publish twice on the same subject and eventually tell us prices will be "updated"? This is after they received so many accolades for their good job they are trying to do with the index.
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