One in five UAE residents is paying more rent than last year

One in five UAE residents is paying more rent than last year
Just 20.4 per cent of UAE residents are currently paying less in housing rent than they were 12 months ago.

dubai - The vast majority of UAE residents are still in the same homes as they were 12 months ago



By Staff Report

Published: Mon 3 Sep 2018, 1:51 PM

Last updated: Mon 3 Sep 2018, 10:47 PM

Over one in five UAE residents were paying more in rent for the same property in Q2 than they were 12 months previously, according to a survey from yallacompare, a comparison site.

The findings come from the company's Consumer Confidence Index Q2 2018, which polled 1,347 UAE residents on the state of their finances, and run contrary to the perceived wisdom that rents across the UAE are dramatically falling.

For example, two recent studies from Chestertons Mena suggest that apartment rents in Dubai declined by four per cent quarter on quarter in Q2 2018, and three per cent in Abu Dhabi. A July study from property portal Bayut said that Dubai rents had fallen by two to nine per cent over the past 12 months, and an April report from Cavendish Maxwell said that Dubai rents had declined by five per cent year on year.

However, according to yallacompare's research, just 20.4 per cent of UAE residents are currently paying less in housing rent than they were 12 months ago. Over 40 per cent are paying the same rent as they were last year and 38.6 per cent are actually paying more.

Some respondents (9.9 per cent) reported paying more in rent after moving to a larger, more expensive property. But the vast majority (66.5 per cent) of UAE residents are still in the same homes as they were 12 months ago. Of those still in the same home, 30.8 per cent are paying more in rent than they were last year - that's 21 per cent of all respondents.

"There's clearly a discrepancy between the perceived wisdom that rents in the UAE are dropping and what people are actually seeing on the ground. The confusion arises from the sampling methods employed in surveys," said Jonathan Rawling, CFO of yallacompare.

"Traditionally, real estate reports focus on the data found in new property listings. With this data, we can track price trends of newly listed properties. This is useful but the fact that the property in question is listed means that there has been a change in tenant. Indeed, this data says nothing about those who are staying put under their existing tenancy contracts. Our data also considers whether tenants remaining in the same location pay more or less this year compared to last. Simply put, consumers may get a better deal if they move but are generally not paying less rent for the same property."

According to Abdul Kadir Faizal, co-founder, Smart Crowd: "This is very questionable as there is a clear downward trend in the rental market that has been existing over the last three years now. However, it may make sense for a few individuals to slightly pay more if the landlord is more accommodating on the payment terms. Furthermore the cost of moving out, paying new agency fees, being close to specific schools and malls might be a factor for some tenants to slightly pay a higher rental rather than looking at alternative options."

For the majority of UAE residents who have stayed put in their current homes, news of lower rents has done little to reduce their own outgoings. Just 19.8 per cent are paying less to rent out the same property now than they were last year, while 49.4 per cent are paying the same.

"This may be down to a perception that arguing over the rent simply isn't worth the hassle. After all, of the respondents who are paying less for the same property, the majority [52 per cent] are only paying five per cent less than they were last year. Still, for a Dh100,000 property, that amounts to a Dh5,000 saving over the course of the year, which is a meaningful sum. We'd recommend trying to negotiate lower rental rates wherever possible. In this regard, it is critical to act more than 90 days before your tenancy is due to expire - otherwise it will renew automatically on the same terms," said Rawling.

- deepthi@khaleejtimes.com


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