Tenants in the UAE’s property market, which is currently seeing an increased level of investor interest, continue to have the upper hand in negotiations, particularly over rental agreements, according to a new analysis by real-estate consultancy CBRE.
In a report on Monday, CBRE said that the UAE is “increasingly a tenant-led market, with occupiers having greater bargaining power and flexibility in negotiating with landlords.”
Over the first quarter of 2021, rental rates for residential properties in Dubai continued their downward trajectory: villa rents fell by 2 percent, while apartment rents dropped by 10 percent in Q1 compared to the same period last year.
However, quarter-by-quarter, asking prices have fluctuated across different locations or communities, with leasing rates posting single-digit declines to double-digit increases, according to property management firm Asteco.
Some landlords are still unable to rent out their properties right away, and tenants are being enticed with attractive terms. “Incentives seen more frequently include rental reductions and the possibility of rental payments in multiple cheques,” said CBRE.
Despite a surge in interest from homebuyers, developers are also sweetening their deals, offering rent-to-own schemes, fee waivers, and attractive post-handover payment plans to attract investors.
Based on data gathered during the first quarter of the year, Asteco said apartment supply in Dubai stood at 1,925 units, with notable deliveries in communities such as Dubai Hills Estate and Dubai Creek Harbour. More units are also expected to enter the market within the next few months and developers have resumed launching new projects.
In Abu Dhabi, approximately 1,700 apartments and 50 villas were handed over during the same period. Another 11,600 residential units are expected before the end of the year.
The UAE has seen an increased level of homeownership demand, with sales transactions surging to record levels in recent months. Last April, more than 4,800 Dubai properties, with a combined value of 10.97 billion dirhams ($2.9 billion), changed hands. The sales value was the highest recorded in Dubai since March 2017.
(Reporting by Cleofe Maceda; editing by Seban Scaria)
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2021