Dubai’s post-pandemic properties rental market trends
The UAE is one of the few countries that have managed coronavirus well. Thanks to the great success of the UAE’s vaccination drive, the Covid-19 cases in the country are presently at the lowest in the last one year. This, coupled with the fact that Dubai Expo 2020 — touted by many as the biggest global event ever — is currently underway, has pushed the rental market upwards.
All experts are unanimous in their opinion that the buildup to this global event has been spectacularly good for the UAE’s economy. Plus, they believe the positive regulations adopted by the government have helped spur business growth in the region.
At present, the demand for certain class of real estate properties is very high, so much so that it exceeds the supply. As a result of this, rentals prices as well as real estate prices have gone up. This is particularly true for areas which are close to the mega event. All prominent residential areas near Expo 2020 have seen a remarkable surge in rental demand. These include, among others, the following:
- Jumeirah Village Circle
- Dubai South
- Dubai Investments Park
- Al Furjan
- Jebel Ali
- Dubai Production City
- Dubai Motor City
- Dubai Sports City
As expected, Dubai Expo 2020 has drawn visitors in large numbers. According to many sources, during this month, Dubai will see no fewer than 25 million visits, which is not a small number by any means. Many of these visitors want to live in close proximity to Expo 2020, and this has resulted in an exponential increase in the demand for rental properties in all the aforementioned areas.
Compared to this time last year, the buzz in Dubai is completely different now. Much of that is due to the re-opening of schools, resumption of most flight routes, re-opening of offices, and restaurants and malls at increased occupancy. Of course, it goes without saying that the successful inauguration of Expo in October 2021 has helped too. The successful transition to normalcy with comprehensive public safety and health measures in place has heralded the end of the coronavirus-related restrictions in the country and pushed the real estate industry’s recovery.
Here are some important post-pandemic property rental statistics:
- The 3rd quarter of 2021 witnessed an upward trend in the real estate market. The affordable housing registered an increase of 14% whereas the luxury housing surged by an impressive 30%. Economists are of the opinion that the fourth quarter will be no different, perhaps even better. The reason for this optimism is obviously the commencement of Dubai Expo 2020.
- Dubai Expo 2020 recorded over 411,000 visitors in the first 10 days. Before the event ends, experts believe near to 25 million people will visit Dubai and the UAE. From these impressive figures, one can easily ascertain that areas in close proximity to the Expo site will be in high demand during October 2021 to March 2022. Both the rental demand and rental prices will grow in such places.
- Residential rents in Dubai will continue to improve in 2022, but the rental recovery, in all probability, will be segmented. Segments that are likely to see the most growth are prime apartment locations and villa districts. On the other hand outer apartment districts and most affordable districts might see slower stabilization rates.
- The apartment rates increased by 3% on average during April, May, and June 2021. In contrast, villa rates increased by 8% during the same period.
- With many tenants still preferring to work from home, there’s a greater demand for rental units that offer better amenities and greater private space.
- Similar trends are visible in popular localities like JBR and Dubai Marina. However, villa developments like Victory Heights and Arabian Ranches posted much better improvements both annually and quarterly.
- How tenants are paying has also changed. Tenants prefer to pay in more cheques instead of one or two payments that was the trend some time back.
- Most tenants are going for rental renewals, which indicates that renters don’t mind an increase in their rent as much as the moving costs and the hassle linked to it.
For sure, Dubai Expo 2020 has boosted the rental market. However, as to the question whether this is a long-term effect or not, that is something only time will tell.