Dubai rents falling…

...at last.

I have no idea what kind of people were paying what was being asked previously. Maybe I’m simply out of touch, but I have no idea who can afford to pay between 2,000 to 2,600 UK Pounds a month for a single bedroom apartment and still think it financially worth being over here rather than back in the UK.

Sun’s married person’s housing allowance is generous, but what would have allowed me to rent a nice three bedroom villa five years ago would now not cover a single bedroom apartment in the area where we now live (thank goodness we bought).

The market here is also very distorted. There’s a rent cap in place, which protects existing tenants – a good thing, in general. This means that some of our friends effectively live for free in their villas, paying their rent capped rates but sub-letting a room or two to people at near market rates, whilst the same villa next door might be freshly rented out to someone at four times the price their neighbour is paying.

Long standing, rent capped houseshares might see 5 people sharing a villa for around 120,000Dhs (approx $33,000) a year between them, with garden, splash pool, free gym and community pool. When that houseshare breaks up, for whatever reason, those 5 former tenants might find themselves each paying around 170,000Dhs (approx $46,000) a year to live in a small apartment, with limited parking or facilities.

I can’t see lower rental prices being anything but a good thing for Dubai’s longer term well-being.

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2 Responses to “Dubai rents falling…”

  1. Seabee Says:

    The rent cap is a good move, but the usual Dubai anomalies in the way it works confuse the whole thing. The present rents are unsustainable because individuals and companies will move on to somewhere else if rents don’t come down, and that will be a disaster for Dubai’s grand plan for the future.
    Maybe this slowdown in the economy will have the desired effect…

  2. Riz Din Says:

    Economists are often quoted saying ‘There is no cure for high prices like high prices’.

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