The rental market is witnessing a downward pressure and rental price for Dubai residential property is on a decline. This has put the tenant in driving seat as there are a lot of options available in the market and landlords are flexible to negotiate to minimize vacancy.
Rental prices have softened in Dubai Sports City, Motor City and Jumeirah Lake Towers as new inventory released in adding to the downward pressure. A number of new projects are handed over across Dubai that has created competition amongst landlords to attract tenants. Owners are offering rent free periods to bait tenants and the number of cheques has increased significantly. During the real estate boom in Dubai landlords would prefer the rent to be paid in a single check and at the most two, but during the current slowdown this has reached to an average for cheques with some landlords even agreeing to twelve cheques in a year.
The rental decline is an effect of the softening sales price that has arise from global factors including the drop in oil price in 2015. The rental decline is expected to continue with minimal changes till we get close to the EXPO 2020 as new workforce arrives in Dubai to complete the infrastructure projects required to host this mega event that will see millions of visitors from around the globe. The new inflow of workers is expected to have a significant number of white collar professionals that need to rent homes around the EXPO site and this new demand will absorb the excess inventory of residential homes in the market pushing the sales and rental price in an upward direction.
There are a number of new policy changes in Dubai and some of them are unique and will boost economic growth and the most beneficial sector from these changes is Real Estate.