Dubai: Fear of eviction, rising rents push residents to buy properties
The emirate’s real estate saw its unprecedented run that started after the pandemic continued unabated this year as well
Published: Thu 27 Apr 2023, 10:45 AM
Last updated: Thu 27 Apr 2023, 2:06 PM
Tenants in Dubai are increasingly looking to buy properties as they fear receiving eviction notices from landlords due to the rise in rentals, said Richard Waind, group managing director, Betterhomes.
According to Betterhomes’ first-quarter 2023 report, the supply of new residential units remains tight in both sales and rental markets, which means little relief from rentals for tenants and price increases for buyers.
“Rising rents and the fear of receiving an eviction notice are increasingly being cited by residents as the main reasons to get on the property ladder,” Waind wrote in a foreword to the report.
The emirate’s real estate saw its unprecedented run that started after the pandemic continued unabated this year as well.
According to official figures announced this month, Dubai real estate transactions jumped 80 per cent to Dh157 billion in the first quarter of 2023 as compared to Dh87 billion in the same period last year. The number of transactions also grew by 49 per cent from 26,066 to 38,715 during the comparative period while sales value grew 62 per cent to Dh89 billion.
The brokerage firm said occupancy rates in freehold areas remained stable while occupancy in leasehold areas hit a record high of 97 per cent.
“Rentals are a direct reflection of supply and demand, and while the rate of increase has slowed from a high of 35 per cent last year, prices are still growing at an annual rate of 16-20 per cent,” it said.
It said Al Khail Heights saw the largest increase in apartment rentals, jumping 14 per cent, with Jumeirah Golf Estate, Al Habtoor City and Dubai Creek Harbour also experiencing double-digit growth.
Betterhomes expects 35,000 new residential units to be delivered this year.
In Q1 2023, approximately 5,000 new homes were completed which is significantly lower than the current market conditions required, it said.
“We don’t expect there to be a sufficient increase in ready supply to materially impact prices until late 2024 or into 2025,” Waind said.
He said the strong performance of the local property market in the first quarter has put any fears of the market slowdown were put to bed.
“Despite the continued upward trajectory of interest rates, and the wobbles seen in the banking sector in March, the market has remained incredibly resilient, bucking global trends and attracting an ever-widening global audience,” Waind said.