With rents drastically dropping all over town it’s time for you to cash in
Kate Goossens, 24 The deal: A studio for Dhs3,500 per month.
‘Previously I was sharing an apartment in JBR and paying Dhs 7,000 per month (Dhs84,000 for the year),’ says Kate, a legal PA from Australia who’s been in Dubai for 18 months.
‘My lease was coming to an end and the landlord wouldn’t reduce the rent to line up with the new lower market prices.’ And, as Kate loved the idea of living alone, she investigated whether she could afford a one-bedroom apartment or studio. The search concluded with a studio in Discovery Gardens, which had a ‘price so good I didn’t really need to haggle.’
‘Although I do miss the buzz of Marina Walk and there are a few problems with Discovery Gardens – not all traffic signals are functional, there’s no undercover parking and there aren’t many amenities set up yet – I love its quiet location, beautiful gardens and proximity to Ibn Battuta and Sheikh Zayed Road.’
Saving: Dhs3,500 per month.
Better Homes says: ‘A one bed costs Dhs75-80,000 in January; now it’s around Dhs55,000. Our tenants like the convenience of being next to Ibn Battuta, and, of course, the proximity to Sheikh Zayed Road means they save time on school and work commutes.’
Moving tip: ‘Keep all receipts (deposits for landlord, DEWA, Empower, etc) so that closing accounts and getting deposits back is much faster and drama-free.’
Stefanie Forbes, 27 The deal: A two-bed furnished villa for Dhs8,500 (Dhs102,000pa).
For three years Stefanie Forbes, a booker for Bareface modelling agency, lived near the Mazaya Centre on Sheikh Zayed Road, paying Dhs90,000 a year for a small unfurnished one-bedroom apartment. ‘I knew prices had dropped incredibly,’ Stef says. ‘So I thought: Why not take advantage of the cheaper rents and upgrade!’
And upgrade she did – to a fully furnished two-bed villa in The Springs, complete with study and garden, park and swimming pool access. ‘The rent was originally advertised at Dhs100,000pa, but the landlord wanted it paid in one cheque,’ explains Stef. ‘I haggled to pay two: 80 per cent in the first and 20 in the second. In exchange the landlord wanted to charge more, so we agreed on a Dhs2,000 increase.’ Stef now has a villa more than twice the size of her old apartment. The DEWA deposit is twice as much for a villa than for a flat, there’s a lot of traffic during peak hours and it’s harder to pick up a cab, but Stef says, ‘If I didn’t jump at the chance of living in such a nice place now, it might be years before I got the chance again. And I’d always dreamed of having a garden!’
Saving: ‘It has actually turned out to be more expensive with all the bills and things. But I scrimped to pay 80 per cent of the yearly rent in one go so I could afford to pay more than my current rent.’
Better Homes says: ‘People have always chosen the Springs because they were the only two-bed villas around, but now tenants are moving there because the lower price makes them a great package deal.’
Caroline Millman, 39 The deal: A three-bedroom villa for Dhs16,666pm (Dhs200,000pa) Caroline Millman and her family were originally paying Dhs16,000pm (Dhs192,000pa) for a two-bedroom apartment in The Greens. ‘It was never going to be long term,’ she explains. ‘Simon [my husband] had lived there since March and when the girls and I arrived in May we decided to move to a larger villa with more facilities, such as a play area and swimming pool.’ The family had to live on this particular side of Dubai as Simon is working on the Masdar project, near Abu Dhabi airport. ‘We were introduced to a house in The Lakes via an agent who didn’t help at all,’ Caroline recalls. ‘Fortunately the family who owned the house was amenable and together we negotiated the contract.’ The new area is full of families, which she says is great for making friends. ‘It’s also very safe so I will be able to resume running once it’s cooler,’ Plus she loves the location. ‘It’s close to Sheikh Zayed Road, Mall of the Emirates and Ibn Battuta.’
Saving: ‘We hope that when our home in the UK is let we will be saving some money, although in the current market we feel fortunate to have a job and live in a lovely place.’
Better Homes says: ‘The Lakes is positioned perfectly for easy access to Sheikh Zayed Road. There are a variety of villas on offer, from mid-size town houses to beautiful Hattan villas. A large majority of these houses sit besides scenic lakes, with views of Dubai skyline. Another of advantage to living here is having access to The Lakes Community Centre. And there are two world-class golf courses only a five-minute drive away.’
Downtown Burj Dubai
Neil Renshaw, 34 The deal: A one-bed serviced apartment in The Address hotel for Dhs120,000pa.
‘I found I could afford a better place of my own all of a sudden,’ says Neil Renshaw, associate director of recruitment firm, Carter Murray. So, instead of paying Dhs7,000 plus bills to share an apartment on Sheikh Zayed Road, he decided to move to a serviced apartment in The Address Hotel for Dhs120,000pa, including deposit and estate agent fee. ‘It’s a very safe community,’ says Neil. ‘Although all the hotel restaurants are a constant temptation!’
Saving: ‘I’m saving on utility bills, internet, my Showtime TV package and laundry. I also get gym membership, spa discounts and a fantastic pool and relaxation area all included!’ In reality I probably only save Dhs500, but I get way more for my money.
Better Homes says: ‘This is a high-end luxury property, particularly attractive to the busy professional who wants to be pampered and experience a top-quality hotel ambiance. And, in Old Town, prices have halved since last year: one beds that used to cost Dhs160,000 are now available for Dhs80-90,000.
Moving tip: ‘Do the homework on the building you want to live in. Find out what the occupancy is. Tell your agent or landlord what you are willing to pay from the offset. Try to get a break clause in your contract or you may forfeit your deposit, and try for 12 cheques (I managed to get five).’
Al Sufouh 1
Sarel Meyer, 27 The deal: A one-bedroom apartment for Dhs5,400pm (Dhs65,000pa).
South African designer Sarel lived in Tecom C, near the Grand Millennium Hotel, sharing a two-bedroom apartment for six months. But he wasn’t happy. ‘I was pretty much living in a construction site and finding a parking spot was impossible,’ explains Sarel. ‘And I missed my own personal space.’ So he decided to quit the Dhs5,500pm (Dhs66,000pa) deal and move.
Now he lives in a 1,000sqft one-bed apartment ‘overlooking the ocean’ between the Burj Al Arab and Media City. ‘Initially they wanted six cheques,’ says Sarel. ‘I declined, then phoned back a week later and they offered me 12.’ On top of that, his contract was amended on request. ‘I can now give three months’ notice if I choose to vacate, whereas I would have originally had to pay the full amount. I even changed my designated parking space to a bigger one!’ His only regret? ‘I should have gone for a two bedroom – they’re going for Dhs85,000 a year.’
Saving: ‘Dhs100pm. It’s not much, but having your own space to walk around naked is… just priceless!’
Better Homes says: ‘The location says it all – this is one of the most central locations in Dubai with a 360-degree view of palaces, the ocean, Madinat Jumeirah and Burj Al Arab. There’s also easy access to Sheikh Zayed Road, Mall of the Emirates, Emirates Golf Club, Knowledge Village, The Palm Jumeirah, and the Marina.’
Rent market myths Busted
Kit James of Rickerby Martin Property Consultancy and Liz O’Connor of Better Homes reveal the truth about Dubai’s shifting rent scene.
There has been a dramatic change in Dubai’s rental market in the past six months. LJ: The leasing market started to change seven months ago, following the sales market’s decline and the start of redundancies. We went from a shortage of supply to a stock increase – property owners realised they could not sell their properties and so put their places on the market to lease. We then entered a period of dramatic decline in rental rates between December and April. Though, throughout May and June 2009 these have stabilised.
It’s now the norm to pay rent in multiple cheques. KJ: Some landlords still insist on one cheque, however two or four cheques are becoming more common. Twelve cheques is still rare – not impossible, but rare.
LJ: If a landlord is hesitant to accept multiple cheques we can offer an additional service to run a credit check and advise the landlord if any negative results arise. We can also offer the tenant financing to pay the rent upfront, which will secure them a better deal.
There has been a shift in landlord-tenant relations recently. KJ: There has. Reasonable landlords are now having to go with whatever the market rent rate is, rather than what they would like it to be. Tenants have far more negotiating power – all be it according to the availability of villas or apartments in certain areas.
LJ: I’m not aware of anything within the law that is changing to give tenants more power. There has been an increase of 100 per cent between our number of inquiries in April/May 2009 and April/May 2008. In a ‘normal’ Dubai market, a strong increase in demand would signify a potential increase in rent. However, I think we need to wait until July to see what’s happening. We need to see if the volume of transactions taking place has been largely due to people upgrading. We also need to see if the mass exodus everyone has been talking about is going to take place.
You shouldn’t bother bringing up the Real Estate Regulatory Authority Index with your landlord. KJ: RERA has worked hard to produce an effective tool. However the market is in a state of flux, so it’s very difficult to keep it up to date. Tenants are well-educated and will only pay the market rate regardless of the index.
Everything at the rent tribunal is done in Arabic. LJ: As far as I know the documentation is in Arabic, however if you are not an Arabic speaker everything is explained to you in English.
KJ: A knowledge of Arabic is helpful. I would go to an Arabic speaking lawyer who specialises in rent contract disagreements. They would tell you straight away whether you were wasting your time or not. Most won’t do the job for free, but will give you 10 minutes of their time.
There are no limits on how much a landlord can fine you if you break your tenancy contract early. KJ: There is a lack of protection for tenants on this. Landlords have different contracts across the board – there are no average terms. But if you sign a contract anywhere in the world and then break it you’re going to pay a penalty. It’s not unusual.
LJ: There were one or two articles published earlier this year suggesting that new laws would cover this, yet no new law that I am aware of has been issued. Typically in Dubai over the last 10 years or so, the market norm has been for the tenant to find a replacement and the rent has been refunded on a pro rata basis. However, this year, due to concerns in the job market, there is a trend towards including a penalty fee in the contract in the event that it is broken early. Typically this is two months’ rent. But this is only written in if both parties agree. 04 430 508, www.rickerbymartin.com, 600 52 2212, www.bhomes.com.
Three rental Hot Spots
As recommended by Kit and Liz.
International City ‘Rents there have dropped massively. Studios used to cost Dhs70,000pa, now they’re Dhs30,000-Dhs35,000,’ Kit Studio 30-35,000 1bdr 40-45,000 2bdr 60-65,000 (Hardly any of the latter available)
Discovery Gardens ‘Price, price, price – this is one of the most affordable hot spots!’ Liz Studio 40-45,000 1bdr 60-65,000 2bdr 80-85,000
Marina Emirates Living ‘This could become the real heart of Dubai’s social scene, so it’s ideal for young, single professionals.’ Liz Studio 85,000 1 bdr 90,000 2 bdr 120-140,000 3 bdr 155-120,000
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faiza faisal Jul 14, 2009 07:46 am
Please could you drop in an e-mail if there are still any flats say 1 bedroom availbel for 40 -45,000.
Rico Lorenzo Jul 12, 2009 08:24 am
why is the rent in satwa still expensive????
amruta Jun 24, 2009 08:56 am
rents in sharjah are decreasing too. In sharjah you get 1BHK in 35k in gud area like Abushagara, al wahda, qussimia. b4 it was 50-55 k for 1 BHK. rents in popular al nahda also decreased.
Anon Jun 24, 2009 05:54 am
I don't think I've ever lived in a city where rent is such a major issue that it gets covered in a magazine like Timeout. This is ridiculous, really. Where else in the world is rent such a major issue?
Stephen Jun 23, 2009 01:24 pm
How about 145 KAED for a type F 2055 sqft in Shoreline Apartments on the Palm?
We were amazed..........