The first news from the UAE rental world was seemingly not too comforting for tenants last week: Dubai was recognized as one of the most expensive cities in the world to live and rent property in. This status was awarded to the emirate by UBS Prices and Earnings study, which examines not only the price level of the main items of expenditure, but both the level of income in 71 cities around the world. And still, Dubai was named the most expensive city in the Middle East, based on these data, including rental costs. Yet Dubai managed to hit this spot in a rating mainly due to its premium real estate sector, where annual rentals exceed USD 3,000.
But Dubai is home not only to exclusive luxury property owners, but also for affordable housing buyers. That’s why the latest JLL report was focused mainly on affordable housing category. For the UAE, according to JLL, property is considered affordable, if it costs around USD 215,000 in sales segment and about USD 19,000 per year in rental segment. And affordable housing is now of greatest demand in the emirate. There are over 820,000 middle income households, representing almost 40 percent of all households in the UAE, which are in need of affordable homes.
However, developers in the UAE are highly aware of a great demand in affordable housing. And that, according to the latest Knight Frank report, will be determining the future success of the Dubai real estate industry in the coming years. New investment opportunities will attract brand new type of investors interested in low-cost real estate category in Dubai. Thanks to them, Knight Frank says, Dubai will enjoy a stable and steady development of the housing sector in the next seven years or more.
And for those Dubai homeowners expecting rentals return to the previous level and keeping their lease homes vacant, the future is unlikely to be too successful, Chestertons said. This analytical agency called Dubai landlords’ behavior of expecting further rental prices increase short-sighted and creating an artificial shortage of units in the rental market. By the end of the year 20,000 new housing units are to be handed over in Business Bay, Dubailand, Sports City and Silicon Oasis. These units would cover any rent offers lack, but hardly could create such oversupply that will make prices go down. According to the propertyfinder portal, the most preferred properties for rent in Dubai and Abu Dhabi now fall into the bracket of USD 13,500 to USD 40,000 pa.
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. And generally, experts now predict that Dubai real estate market would make another sharp turn for the better, so the forecast can be considered optimistic in all respects.