Renting – The Smarter Financial Move

Moving to a foreign country can be a daunting task and trying to it find a place that perfectly suits your needs and requirements is even more intimidating. With the economy of Dubai growing by leaps and bounds every year, it has become one of the most economically beneficial and dynamic cities in the world. It offers you fantastic opportunities, beautifully designed structures, along with a safe and harmonious environment. These factors allure people into coming and settling here. But, the more the population grows the higher is the demand for rental properties. So, what are the benefits of renting an apartment?

Save money - You may think it is impossible to save money while renting an apartment inDubai. But it’s not as difficult as you think! Most people see rent as needlessly throwing away money. However, if you only have to stay for a short period of time, wouldn’t it be a lot more convenient and not to mention easy on the budget to rent instead of buying a house? When you buy an apartment, you end up paying a lot of tax, insurance fees, maintenance costs etc. Therefore, opting for a rented house can be considerably cheaper than buying.

Liberty to Choose - If you have just moved to Dubai, it may take a little while for you to get a feel of the region. You may need time to understand which area is ideal for you to live in. With renting, you have the liberty to move in or out as per your convenience.

Low to No Maintenance - Your responsibility of maintaining the house is drastically reduced. You don’t have to worry about any of the extras when living on rent. The landlord takes cares of almost everything.

Facilities – More often than not, rented homes provide you with basic amenities so you don’t have to worry about a thing when moving in-to one.

No Risk:  The housing market, no matter where you are, tends to fluctuate. And, if in case you plan to put up your apartment for sale; in the recession period, you may perhaps even lose money. But, with rented homes you will have no risk of losing money.

Renting is beneficial for those who do not intend staying for long in one place whereas buying is for those who want to have the independence of home ownership. In any case, it is up to you to make a decision based on your needs and requirements.

Significance of RERA

Dubai is no longer seen as a dry, barren desert with scorching weather. It has over the years, become a global attraction for millions across the world, with a little something for everybody. However, one is sure to be shaken when they read about rental scams in Dubai. For instance, recently, there was news about residents and landlords who had been scammed by phony rental agents.

The most widely-known story was that of two owners of a highly reputed entertainment company. These owners cashed in rental cheques, but failed to pass on the total amount owed to the landlord; before running away from the country with millions of Dirham’s. It is against the law for a person to execute any form of brokerage activity in Dubai until and unless they have a licence by the RERA (Real Estate Regulatory Agency). The victims of the rental scam had one thing in common; they all said that; they had given money based on trust, and no checks had been done by any of them.

Prior to RERA, there was no standard sales agreement, no training for rental property brokers, no standard form or clauses, or even a legal necessity for a lawyer to help out. Thus the RERA was founded – an organisation which helps in the regulation of agencies, agents as well as developers. It also helps in liaising with, and recommending new property laws to, the Government. Besides, it also aids in developing various processes and documentation, for standardised procedures that are linked to property management. This way, they can keep a check as well as help in establishing real estate agreements, which consist of rental agreements. The agency also gives information and statistics on the Dubai property market to both, the Government and the public.

Thus, the Real Estate Regulatory Agency (RERA) has established itself for the betterment of Dubai's rental property market. This way several corruptible agencies, developers, and agents will be filtered out, leaving only genuine property investors the opportunity to deal with real estate transactions in Dubai.

Popular Communities to focus on when looking at Rentals in Dubai

The roller coaster ride for the property sector in the Middle East continues. The real estate segment has been plagued by demand-supply constraints and infrastructural support issues. After months of price hikes, the global financial slowdown had finally began to affect the market sentiment. The bubble soon burst and the past year and half ended up bearing witness to some of the strongest negative revision in purchase and rental rates.

The current year began with a lot of promise. The authorities and regulatory bodies stepped in to settle frayed nerves and curb the friction between developers and buyers/renters. While the rentals in Abu Dhabi continued to be affected in the first half of 2012, the situation in Dubai appears to be coming back to normalcy. Data coming in from various sources seems to support this view.

Two of the most popular areas for prospective realty customers in Abu Dhabi continued to swing wildly on the inquiries charts. Both, Al Raha Beach and Al Reem Island kept trading places on realty observers’ indices. Apart from over supply, industry sources were also found to be pointing towards falling construction quality for the drop in prices.

The realty market in Dubai on the other hand, has been seeing better days than before. Residential communities in the New Dubai area continue to be in high demand among prospective buyers/renters. The prestigious Dubai Marina garnered the maximum votes in the popularity charts and this was reflected in the comparably higher rental rates being quoted there.

In the Villa segment, it was the Springs and Meadows communities that were seen garnering a high inquiry rate. Even with a sizable amount of villa stock available, rental rates were seen to be five to eight percent higher in 2012. Mirdiff and the Arabian Ranches community too saw rental rates rising in comparison to the previous year. The Apartment rental segment saw the Dubai Marina area and Downtown Dubai with the maximum amount of interest from prospective customers. Properties such as the Executive Towers and Emaar’s Greens commanded rates that were higher by an average of six to ten percent.

One common thread running through the realty sector has been that the demand and subsequently, the rentals were higher for established communities that had earned their reputation for quality construction and the overall management practices. 

Global Slowdown promises to be a blessing in disguise for the Dubai’s Rentals

The controversies that have been savaging the Dubai rental properties segment appear to be relentless in their onslaught. The origins of these developments can be traced back to about a decade or so. For long, Dubai had seen realty developments on an unprecedented scale. Both, the authorities and master developers were leaving no stone unturned in their efforts to transform Dubai into the pearl of the Middle East. No cost was too much, no concept outrageous. Pushing the boundaries of acceptability, Dubai seemed to be the dream that straddled the old and the new with total aplomb!

Trade and commerce too responded and brands, both big and small made a bee line for the Emirate. Tourism took off heavily, with resorts, leisure parks and other hospitality ventures tried to out do each other in both scale as well as uniqueness of experience. Dubai soon became the place to be seen in for everyone. Businesses, individuals, employers, employees, everyone; people were said to be taking the next flight out to Dubai.

Fuelled by this growing demand, infrastructure began to be drafted into place. An extensive road network began to be developed. Realty soon began the buzz word as authorities in a master move, opened property ownership to international investors. The sky was literally the limit after this. Property owners were devouring everything that the developers could throw at them. Luxury and opulence became the preferred calling cards of players and investors alike. Since not all owners would come to stay permanently, many decided that their prized possessions could earn them fantastic returns. The market for Dubai rental properties took off.

Many insiders were however starting to get worried. The economic climate was becoming harsher by the day and few doubted that a correction was in the offing. The only question on their minds was when! About two years ago, the first signs came calling and the Dubai rentals market bottomed out.

Developers and investors alike were panicking. The former saw their credit lines drying up and many projects had to be put on hold, some for indefinite periods of time. Investors on the other hand saw a significant chunk of their asset value getting wiped out overnight. Even the demand for properties on rent in Dubai slowed down drastically.

Quite a few controversies have emerged following this. Rental scams, foreclosures, etc. left no one untouched in the industry. Ultimately, the Real Estate and Regulatory Agency (RERA) and the other authorities had to intervene and bring in some semblance of order. The rules governing the realty industry consequently have seen a lot of refinement. This refined and inherently efficient system of functioning that has come about during a tough time should be seen as an unlikely boon.

With business being cyclic in nature, it is only a matter of time before things start to get better. When this happens, Dubai should be poised for yet another shot at the skies. 

Dubai rentals set to become pricier at properties along the beachfront

The realty market in most parts of the globe is governed by the rules of demand and supply. Dubai too has been no exception and it had enjoyed a decade of fantastic returns for property owners for over a decade. However, the global economic slowdown that reared its head about two years ago put a dampener on things and Dubai rentals had been plummeting for in the past months.

This scenario simply meant that it was a time for tenants to rejoice as they believed that the bubble had finally burst. Many claimed that the prices of properties for rent in Dubai had reached unheard of levels and that a price correction had indeed been inevitable.

The waxing and waning of fortunes however is cyclic in nature. Buoyed by corrective measures taken by the industry and strong support from the authorities, the prices are experiencing a recovery in some areas. This has been particularly observed by those seeking houses for rent along the beachfront in Dubai.

Many developments along the waterline have been quoting rentals that are higher by the tune of 10 to 20% over what they were in the preceding two years. The beachfront area is dominated by two premier developments. Other than the prestigious Jumeirah Beach Residences and the Shore Line Apartment community by Palm Jumeirah, the Palm Jumeirah Villas are the only beachfront properties.

With the demand supply coming into play, it should come as no surprise to note that the villas for rent were commandeering almost double the rental hike than their apartment counterparts. Luxury bargain hunters looking at a property for rent would be better served if they were to look at options along the Jumeirah Beach Residence. This is so as the total property stock is higher out here in comparison to that of the villas.

Demand at the exclusive Shorelines community settlement has remained relatively stable. Even within the community, a strong preference has emerged for beach facing apartments that command a higher property rental. Thus, there could be bargains to be had here if one were not too picky about having a beach view.

At the end of the day, it all boils down to personal preferences. This statement holds true even when one is looking at a property for rent in some of the exclusive developments in Dubai. Simply ensure that all dealings are conducted through authorised brokerage firms and the due diligence has been carried out. 

Dubai Realty segment readies itself for a second coming

The Desert, Leisure Options & Realty are the three most discussed things in Dubai. While the first two are tempting enough, it is the third and the final one that is going to be in focus today. High expat population, the welcoming nature of the locals, a progressive government and high quality infrastructure have all contributed into the transformation of Dubai. Over the years, this sleepy desert village has blossomed into a multi-faceted extravaganza that is unparalleled in the world.

There is one thing that everyone needs and Dubai is no exception to this – it is housing. Whether it is owned or rented, the realty market in Dubai is characterized by constant churn as the demand-supply equation changes. The past couple of years saw one of the worst times for the realty situation in Dubai. Prior to this, the rentals had been skyrocketing, fantastic developments were being announced and completed every other day and people were in a good mood overall. Then the economic crisis happened and the market bottomed out.

The Dubai property segment saw its fortunes being turned upside-down almost overnight. Rentals plummeted and even properties in hitherto prime areas were left waiting for buyers/renters.  This depressed state of affairs saw many a shakedown in the industry. Businesses folded up, tenants started defaulting on payments, and projects fell behind schedule and so on.

But as is the case with every industry, the slowdown too had to pass. Since the beginning of 2012, the realty scene in Dubai has been showing signs of a comeback. Maybe it was not to the levels of yore but definitely to a stage where it is profitable for all the stakeholders that were involved.

Leading from the front are the prime areas or those that have a sound backing in terms of quality construction, right sized accommodation stock, connectivity in terms of infrastructure and social surroundings, etc. The Dubai Metro is facilitating the development of new growth centres that is taking the load of the already saturated, existing locales. The authorities too are pitching in with a clarification on the existing rules, better enforcement, levying of stringent fines and other punitive measures.

All this activity is part of a confidence building exercise where everyone is meant to benefit. So the next time, one is ready to fly into Dubai, remember that things may seem to be a little tough, but they are only going to get better.

Dubai Authorities clamp down on rental housing irregularities

Dubai has had a long tradition of attracting all kinds of people through its doors. For decades, its growth engine has been powered by hordes of bachelors. It was these blue collar workers that flocked to the desert town and transformed it into the bustling megapolis that Dubai is today. Since then, even white collar workers have joined their blue collar counterparts and made Dubai their new home.

But, as Dubai takes its place at the top of the development charts in the Middle East, the authorities have been cracking down on bachelors that break the accommodation rules. They seem to be frowning upon the whole notion of ‘Sharing is Caring’. Now, the authorities have specified that blue collar workers must seek accommodation in labour camps that seem to have been setup exclusively for them. They cannot seek accommodation in the rest of Dubai.

White collar workers on the other hand are permitted to rent and purchase accommodation in Dubai provided they meet certain requirements. Overcrowding, sub-letting and other such practices are strictly prohibited. Families renting out a villa are prevented from renting it further to other families.

Bachelors on the other hand must avoid overcrowding in their rental accommodation. Only one occupant per bedroom is prohibited when an apartment is rented out to bachelors. Thus, only 2 occupants are permitted in a 2 Bedroom apartment. The same cannot be further let out to other bachelors. The Dubai Municipal authorities have clarified that bachelors are white collared employees. They are single and are living without their families or partners.

All these rules and guidelines however are pre-dominantly applicable to bachelors living in leasehold areas. Those living in freehold areas are currently exempt from these proceedings. Thus, they won’t be fined hefty amounts that go up to DH 50000.

So the next time you go hunting for a rental accommodation, make sure you avoid the above pitfalls.