Dubai’s real estate market is expected to see an increase in tenants moving out of their rented properties in the coming months due to several factors, including the easing of rent hikes in certain areas, an updated Rera rental calculator allowing for potential rate increases, and an increased supply of new residential units. However, the high cost of moving could also prompt some tenants to reconsider relocating. Rent renewals in Dubai saw a 12% year-on-year increase in the first quarter of 2024, with tenants consenting to above-average rental hikes.
Asteco analysts state that tenants are likely to move due to the gradual easing of upward rental movement, the updated Rera rental calculator allowing for potential rate increases, and an increase in supply from additional units being delivered to the market. With annual growth rates slowing to single digits for both apartments and villas, tenants in Dubai will have more options available at lower rental prices. Global consultancy Knight Frank revealed that 43,500 homes are expected to be delivered per year for the next six years, well above the historic level of completions.
Usama Sukhera, leasing team leader at Huspy, mentioned that with more projects being launched and new communities being handed over, tenants have more options at lower rental prices if they are willing to add 30 minutes to their commute. Some tenants are actively negotiating contracts with landlords ahead of expiry and exploring longer-term lease negotiations to lock in prices. Jacob Bramley, senior leasing manager at Betterhomes, stated that the high cost of moving has led many tenants to reconsider relocating and ultimately stay in their current place to avoid expenses.
Tenants in Dubai are exploring flexible payment terms to cope with rising rents. Some are downsizing within the same community, while others are opting to relocate to more affordable areas. Sachin Kumar Singh, Business Head and Managing Partner at Foremen Fiefdom, mentioned that tenants are prioritizing affordability and long-term financial goals by downsizing and exploring alternative communities with lower rents. By taking these measures, tenants in Dubai are better equipped to navigate the challenges posed by rising rental prices and secure favorable housing arrangements.
