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Rental breakdown

The average rent in Dubai has almost halved in the past year, according to a new report by a real estate consultancy firm.

Colliers International’s research found that rents have undergone, on average, a drop of 49 per cent in the third quarter of this year compared to the same period a year ago.

“People lost their jobs and companies downsized and generally the demand for residential accommodation dropped over the period,” said JP Grobbelaar, director of research and advisory at Colliers.

The report also highlighted that about a quarter of residential properties in Dubai are lying empty. Many landlords refused to drop their rents last year, but as the downturn took hold they were forced to drop their rates.

Dubizzle, the popular classified web site, saw this starting to happen earlier in the year.

“At the beginning of the year our rental ads went up by almost 1,000 per cent because a lot of people were not renting their units out. After the crash a lot of people who were sitting on their property decided to try and get some revenue on it,” said JC Butler, from Dubizzle.

He added that the biggest decline can be seen in Discovery Gardens where studio rents fell from around dhs95,000 to dhs40,000 and one-beds are now going for dhs55,000, compared to dhs120,000 last year.

In Dubai Marina, one of the most sought-after areas in the city, rents for one-bedroom apartments have gone down from dhs130,000 or more a year ago to dhs90,000 or less now.

Terms and conditions have also changed to reflect the sharp decline in rents being charged.

“One or two cheques is pretty unheard of now, any landlords still asking for that must have been living in a cave,” added Butler.

“There are landlords asking for one cheque but I would be doubtful if they ever find anyone unless they are willing to compromise on price to get that one cheque.”

With vacancy rates running at 25 per cent and 40,000 new units set to hit the market in the next two years, Colliers believe rental rates will continue to fall across Dubai.

“If I were a landlord I would try to lease my property at the best rental I can negotiate because in the short to medium term we expect rents to decline,” advised Grobbelaar.

shane.mcginley@7days.ae

Categorized | World News

Tags : after-the-crash, butler, city, classified-web, dubai, dubai-ruler, international, inviting-people, jobs, late-salaries, over-the-period, real-estate

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Rental breakdown

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