Dubai tenants 'not aware' they can negotiate on rent...
Don’t be shy, it’s time to bargain.
While many experts – including Core Savills – are saying that rents in Dubai have dropped in the past year by about 4 to 9%, particularly in higher-end suburbs and apartments, it seems that few people are actually seeing that drop in reality (perhaps because they just don’t know to ask/insist?).
And yes, a new survey conducted by compareit4me.com, shows that the reported rental drops in Dubai aren’t necessarily helping the wallets of renters just yet – of the 300 Dubai residents they surveyed, 47.1% of people’s rents stayed the same in the past year, 42.6% saw their rents rise and only 10.3% of the respondents managed to score a decrease in rent.
Of the 10.3% that had their rents go down, 71.4% scored a 5 to 10% decrease (which, when you think about it, on a Dhs120,000 rental would be Dhs12,000 a year, and this works out to a saving of Dhs230 a week. Hardly chump change).
Property firm CBRE also claimed that residential rents in Dubai fell by 1% quarter-on-quarter in Q1…
“While we cannot say that a consultancy with such high standing has got it wrong,” Jonathan Rawling, CFO of compareit4me.com, told Gulf Business of the expert reports not lining up with their survey, “there does appear to be some disconnect between what market reports say about rental rates in Dubai and what people are actually seeing on the ground,”
“Our best explanation for this is that renters in Dubai aren’t aware that the market could now be more favourable to tenants. Several survey respondents said that they ‘hadn’t thought to ask’ their landlords about a reduction in their rental rates, highlighting the fact that many tenants simply accept their lot when it comes to renting.”
The survey also showed that whether rents went up or down depended on what suburb you live in – in Deira, Bur Dubai and Jumeirah, very few respondents saw their rents decrease. The majority of cheapening rents were in suburbs like Al Barsha, The Palm Jumeirah, Jumeirah Lakes Towers and Dubai Marina.
What about the year ahead? How much can we bargain?
Well, 45 per cent of respondents expected their rent to increase this year, and only 16.2% anticipated a decrease in what they pay.
But real estate firm Asteco points out that more and more units coming online means that 2017 will definitely be a year in which renters can bargain with landlords about rent.
“Tenants will be offered a significant choice of completed properties in 2017 in both established and new communities,” John Stevens, managing director, Asteco told Gulf Business.
“The additional supply will continue to put downward pressure on market rates, which will place the negotiating power firmly in the hands of tenants, despite a forecasted increase in population.”
Rawling from compareit4me.com encouraged people to negotiate too:
“When you’re talking annual rental rates of Dhs100,000 and above, even a 5 per cent decrease can net you some pretty handy savings. After all, you won’t just be saving on the cost of your rent, but you’ll also see your Municipality Fees drop slightly, along with your annual agency fees. As a result, it’s worth asking your landlord for a price cut if you’re renewing soon.”
So basically? Go on, don’t be shy, just try…
Image: Getty Images