Almost 65% of Dubai residents forced to relocate due to rent increases
According to a poll by price comparison site MoveSouq.com, which surveyed 300 Dubai residents, around 84% of the respondents saw a rent increase in 2014 and about 65% said that they would consider relocating to a new home and not renew their lease. Most feel that owing to these large rental increases and to possibly more to come, they would not be in a position to afford such rents.
However, 36% of these respondents saw a rent increase ranging from one to 10% while 48% of the residents said that they faced a hike of more than 10%.
The poll also noted that 75% of those who faced a rental hike of more than 10% are those considering to move out.
Bana Shomali, CEO of MoveSouq.com explains: “The latest results of our survey are reflective of the overall price increases that Dubai residents faced during late 2013 and early 2014”.
“It would be interesting to see how these trends change over time given the current stabilisation in housing prices,” he adds.
Dubai’s rental market, which was overheating due to a strong recovery in the residential sales market, is now showing signs of a slow-down.
According to a recent report by real estate consultancy Asteco, average apartment and villa rental rates dropped by 2 and 3% respectively during the third quarter of 2014.
However, year-on-year rental growth remained high, with most areas in the emirate posting double-digit growth.
While localities such as Palm Jumeirah and Sheikh Zayed Road saw average apartment rates rise by 21% in 3rd quarter of 2014 year on 2013, the rise was higher in Jumeirah Lakes Towers at 42% and Dubai Marina at 36%.
Affordable communities such as Discovery Gardens and International City saw year-on-year rents increase by 23% and 40% respectively.
Asteco forecast that many tenants are still likely to see rental increases as per the RERA rent index. They also foreseethat because of that, many could be lead to relocate to other affordable Emirates.