84% of Dubai residents facing rent hikes this year
The analysis by MoveSouq.com, a Dubai-based comparison site for moving and household service companies, was based on an online survey of 300 Dubai residents
Around 65% of respondents to a new survey said they are planning to move to a new home in Dubai due to rent increases, with nearly half facing increases this year of more than 10%.
The analysis by MoveSouq.com, a Dubai-based comparison site for moving and household service companies, was based on an online survey of 300 Dubai residents.
The data found that 36% of Dubai respondents said that they had experienced an increase between 1-10% in their rent expenses this year, while 48% of respondents said the rental hike was more than 10%.
As a consequence, 65% said they were faced with having to move homes when their lease comes up for renewal. Of those who reported having to pay more than 10%, 75% said they were opting not to renew their lease and move to another cheaper location.
“The latest results of our survey are reflective of the overall price increases that Dubai residents faced during late 2013 and early 2014. It would be interesting to see how these trends change over time given the current stabilization in housing prices. We will continue to run these surveys periodically and share the results with our partners,” said MoveSouq.com CEO Bana Shomali.
However, there is hope in sight for those facing rental increases as a new report by consultancy firm Asteco found a slowing down of both rental rates and sales prices in the third quarter of 2014.
In terms of residential rental rates, Discovery Gardens and International City registered a 7% drop following previous year-on-year record growth levels of 23% and 40% respectively.
The report highlighted the possibility of further rental increases for these communities as per the RERA rental index, which could prompt further relocations to the Northern Emirates although it is anticipated that this trend will start to slow down as occupancy levels in the city's more affordable communities stabilise.
In comparison, some of Dubai's prime areas, such as Downtown Dubai, have remained relatively stable and Palm Jumeirah recording 3% quarter-on-quarter growth due to restricted supply and ever present demand.
"The popular Dubai Marina, which has suffered from long-term construction and traffic congestion woes, saw a 2% decline since Q2, as tenants look to relocate to more accessible areas," said John Stevens, managing director, Asteco.