Given the downturn in the Oil and Gas industry and the knock-on effects that this has had on the overall numbers of expatriates leaving the UAE, Dubai is still moving forward at full pace on its path to the EXPO 2020. A sizable number of new property developments, both apartment complexes and gated villa compounds are still being announced daily in a bid to capitalize on the population and tourism growth that Dubai’s leaders have projected will occur for the next 3-4 years.
At Echo-Xpats, the biggest question that the majority of our inbound relocating clients are asking at this stage is ‘are rental prices dropping and will it continue?’
The simple answer to this question is yes and in our opinion the decrease in rental prices does not look like it will stop anytime soon. One of the main contributing factors to this market shift is quite simply down to the traditional supply and demand model as more and more apartment complexes are being handed over every month giving prospective renters a massive choice of affordable and upscale apartments to choose from.
At Echo-Xpats our inboxes are bombarded every day with pre-launch offers of off-plan properties that have yet to break ground or ‘last few remaining’ offers for apartments, supposedly deals of a lifetime! This explosion of residential and commercial properties from seasoned companies such as Damac Properties and Dubai Properties have seemingly appeared from out of no where meaning the supply will still continue long after 2020.
One factor that we feel is making an impact on certain established expatriate housing communities is the age and condition of the properties themselves. A prime example of a location that has seen a significant drop in rental prices is the Springs community within the Emirates Living District. The first phase of the Springs was handed over in 2003-2004 and as we approach 2017, the villas are now in many cases suffering from neglect and dated interior features that put many would be renters off the development.
There are many other examples of housing areas that have also suffered from a similar fate and are now in desperate need of refurbishment, renovation and an overall investment in the property to bring it back in favor with families moving to Dubai.
Flagship real estate developments such as the Palm Jumeirah have also seen a slight decrease in rental price although nowhere near as prolific as the Dubai Marina, which has suffered the most out of the “New” Dubai’s housing areas. A two-bedroom apartment in the Dubai Marina in a reputable quality building has now dropped to below AED140,000 per annum which is coming dangerously close to prices in the 2009-2010’s real estate crash.
Companies that are still relocating to Dubai are realizing this shift in prices and are capitalizing on this depressed market condition, offering individuals less annual housing allowance and protecting their cash flow by paying landlords in multiple cheques rather than the Dubai norm of a single installment.
Overall, Dubai’s outlook is certainly gearing up to be one of great things, with massive scale tourism boosting projects such as the Dubai Canal Project and the Dubai Parks and Resorts theme park first phase that opens late 2016.
The positive news for Relocation Companies and individual Renters in Dubai is the huge choice and range of quality properties that are now available to more people than ever before!