UAE Tenants take advantage of Lower Rents and Sales Prices
UAE Tenants take advantage of Lower Rents and Sales Prices to upgrade their homes
Stay-at-home measures during the pandemic have helped people realise how important it is to have more living space, a garden or pool.
The stay-at-home restrictions and surge in employees working from home during Covid-19 have led many people in the UAE to reconsider their living spaces, as they take advantage of a drop in rental and sales prices to upgrade their properties.
The fall in rents and property prices make it the perfect time to negotiate with landlords and brokers to get a good deal on bigger accommodation, according to industry experts.
Average annual residential rents in some areas of Dubai declined by 15 per cent in the second quarter, according to property firm Chestertons, which has forecast further reductions in the second half of this year. Meanwhile, average apartment prices in the emirate fell 9.8 per cent on an annual basis, while villa sales prices dipped 7.1 per cent, according to the property consultancy.
“There has been a significant surge in customers searching for villas and townhouses for sale in Dubai. Being stuck at home during the lockdown, people have realised how important it is to have more space, a private garden or a pool. Such properties are nowadays better priced and offer good value in upsizing – both for sales and leasing,” says Dan McGeachy, secondary sales director at Aqua Properties, a real estate broker in Dubai.
Brokers have reported increased interest in communities such as Dubailand, Palm Jumeirah, Emirates Living and Dubai Hills from customers looking to upsize their properties.
The National spoke to three people in Dubai who have either rented or bought bigger properties during the pandemic.
Apartment to villa in Dubai Marina
Andrew Cummings, a British expatriate in Dubai, was renting a 139 square metre (1,500 sq ft) two-bedroom apartment in Beauport Tower on Marina Promenade, Dubai Marina, for four years. In March this year, he took advantage of the cheaper rents to upgrade to a 372 sq m three-bedroom villa on the Marina Promenade.
The 38-year-old co-founder of real estate broker LuxuryProperty.com wanted a more spacious house for his wife and four-month-old daughter. While these villas had caught his eye when Mr Cummings moved to Dubai in 2016, it was out of his budget then. So, when rents dropped, he jumped at the opportunity.
“The size of my current lounge, dining room and kitchen alone is bigger than my previous apartment. I also have a massive terrace and the villa is located right next to the pool. Plus, I am staying in a premium area. To get this space, I didn’t have to move out to The Meadows or Arabian Ranches. Moving to this villa, we didn’t feel like we were cooped up during the quarantine,” he says.
While Mr Cummings currently pays Dh195,000 in rent for the villa, the property would “cost Dh300,000 in annual rent three to four years ago”. He was paying a rent of Dh170,000 for the two-bed furnished apartment in Beauport Tower.
The Marina are very rare. If I didn’t get this property, I would have probably moved to a villa with a garden, probably in The Meadows,” says the real estate professional who plans to buy a villa with a garden and pool next year.
Mr Cummings did not ask his landlord for incentives because he knew he was already getting a good rental deal.
“If I had signed the lease two months later, I would have pushed for more sweeteners. But, I already have a good deal. It’s the lowest priced villa in this area,” he adds.
The property expert says the market has never been better for a buyer or a tenant, with an abundance of deals.
“If you are a buyer, think about your long-term plans. Work with good agents, find the right property in good condition and if you do some renovations, you can add value. If you are a tenant, negotiate hard. There is a lot of supply. Long-term tenants are valuable to landlords,” he says.
Bigger is better in Dubai Hills Estate
The stay-at-home restrictions during Covid-19 made Gary Allen, a British expat in Dubai, realise the importance of bigger premises for his family. The real estate broker with Allsopp & Allsopp, his wife and three-year-old son were renting a 175 sq m three-bedroom apartment in Al Andalus in Jumeirah Golf Estates for a year. He was paying Dh100,000 in rent.
“The stay-at-home rules made us realise that with a lot more cooking and entertaining going in the house, we needed outdoor space. If we are going to be working from home, then I thought it would be good to make the move now and stay put for the next five years. We had our lease renewal in April and extended it by a few weeks, which took us through to June,” says the 28-year-old who has been in Dubai for three years.
In June, the family moved to a 251 sq m 5-bedroom villa in Dubai Hills Estate with a yearly rent of Dh125,000. Mr Allen also viewed another property in Arabian Ranches and a townhouse in Jumeirah Golf Estates, but wasn’t convinced about the location.
“I opted for this property because of the location and the layout. It is a corner unit. Dubai Hills Estate ticks all the boxes for a family and the quality and finish of the properties is great. It is very affordable as well,” he adds.
The property professional says Covid-19 has made rents more affordable. Aside from the good deal on the villa, he also got a 50 per cent discount on rent during the two-month lease extension in the Al Andalus apartment.
Mr Allen says being a real estate agent did not make it easier for him to find and move into a new property. “There was a lot of demand in the area. I did everything myself and did not go through an agent. But in hindsight, I would rather have paid the 5 per cent broker fee than go through the stress of doing everything myself,” he adds.
He advises people looking to upsize their property to use a good agent who will take the stress away, find the right location and negotiate when possible, “with the landlord or the movers”.
Tenant turns property owner in Dubai Marina
Marcus Richards, an architect in Dubai, has been living in rented properties for the past 22 years. On average, he spent Dh100,000 in annual rent every year. Shocked at how he may have inadvertently spent a total of about Dh2.2 million on rent in Dubai, Mr Richards decided to buy a property instead.
The British expatriate was renting a 88 sq m apartment for five months in Liv Residence, Dubai Marina. But when a 136 sq m 2-bedroom apartment in the same building came up for sale for Dh1.9m, he did not want to miss the opportunity to become a homeowner and purchased the apartment in May.
“People living in Dubai long term realise that they pay a lot of money in rent. My apartment is also a good investment because I can make income on it when I am not in town. People who don’t take the risk today are the biggest risk takers,” he adds.
Mr Richards says similar units had been listed for Dh2.3m to Dh2.4m in the past few months, so he knew that Dh1.9m was a good price. Although he could have purchased a similar property for about Dh1.3m, it would have been in an older building, while buying a villa in The Springs or The Meadows meant that Mr Richards would have had to increase his budget to Dh4m.
“During 2002 to 2003, units like these in Dubai Marina would go for Dh5m to Dh6m. You have to take advantage of this market when a lot of people want to sell or move their funds elsewhere,” he says, adding that if a unit in a new property comes up for sale in Dubai Marina, it’s a “no-brainer for a prospective buyer”.
(Source: The National)
