Property service charges in Dubai are set to increase following the heavy rains experienced last month. Developers have responded by offering free maintenance and cleaning services to address the damages caused by the unprecedented rainfall. Prathyusha Gurrapu, director and head of research at Cushman & Wakefield Core, mentioned that the government’s mandate for developers and community managers to provide free repairs and cleaning services will lead to higher service charges and insurance premiums in the near future.
Dubai’s top developers, including Emaar Properties, MAG, Damac Properties, and others, have offered free services to tenants affected by the heavy rains. This initiative benefits residents in major freehold areas such as Business Bay, Downtown, JBR, JLT, International City, Palm Jumeirah, and more. The handling of community management challenges post-rainfall is expected to influence decision-making for potential buyers and tenants considering locations for purchase or rent.
Despite fears of oversupply in the residential property market in Dubai, Gurrapu clarified that there is no significant concern at the moment. The delivery of residential supply remains aligned with forecasts, with no immediate threat of oversupply. However, the launch of major projects in the coming years could impact the supply-demand equilibrium if not managed effectively. City-wide rents have been increasing consistently, with a 20% year-on-year rise and a 72% increase compared to Q1 2020.
Rising rents and rental yield levels are anticipated to drive end-user purchases, especially in the ready market where mortgage costs are expected to stabilize in the upcoming quarters. Gurrapu mentioned that Rera’s rent calculator, recalibrated in March 2024, will help reduce discrepancies between renewals and new rents, leading to a decrease in disputes over rental increases. The Real Estate Regulatory Authority’s efforts towards aligning the rent calculator with market pricing aims to create a fairer rental environment for tenants and property owners in Dubai.
