Landlords are getting a reality check as tenants up and leave instead of paying outrageous rents. Can that be making anybody happy?
Rental market in Dubai makes for a moving experience
They say moving to a new home is between death and divorce on the list of high-stress situations. They make global financial crises, bank standstill negotiations and Greek-style sovereign debt bail-outs seem like child's play in comparison. I've just had a week of sharp-end tension, the culmination of a couple of months of inexorably rising stress levels, as I finally bit the bullet of the Dubai property market. Falling rental prices meant that my lovely Umm Suqeim villa, in which I spent three happy years, no longer made economic sense. A rent that seemed reasonable back in 2007, and remained affordable and feasible even after three upward reviews, suddenly, in the changed circumstances of 2010, seemed a crazy extravagance.
There are some interesting dynamics at work here. Over the past few weeks, I've done my own impromptu, and fairly random survey of residential rents in Dubai. Asking prices, I conclude, are some 35-40 per cent lower than a year ago; tough negotiating can push the "last price" nearer 50 per cent down. Second, locations at the Abu Dhabi end of Dubai are more sought after than ever. With a growing number of commuters making the daily trek down the E11, the extra 15-30 minutes gained from living in those areas is a real time-saving on the journey. I came across many AD-based house-hunters in my month of searching for new accommodation.
But rents in those locations Dubai Marina, Jumeirah Lakes Towers, Barsha and other parts of "new" Dubai have not held up noticeably to reflect this demand from residents priced out of the capital. I can only assume that the number of units coming on stream over the past six months in Dubai has compensated for this new demand. What a wonderful mechanism the free market is, when it works in your favour.
The final bit of the jigsaw is this: local landlords seem quite happy to take a hefty financial loss by leaving their properties empty, rather than cut prices to reflect the market. In the cul-de-sac in Umm Suqeim ("don't call it a compound" said the estate agent), mine was the fourth villa to be vacated in the past three months. The landlord was unwilling to negotiate a realistically lower rent, despite the obvious evidence that tenants would call his bluff and quit. This is a serious problem.
If desirable areas such as Umm Suqeim and Jumeirah end up as ghost towns of deserted, overpriced villas, it will be another body blow for the Dubai property market. Landlords need a reality check, and they are getting it. Anyway, I quite quickly found a nice, three-bedroom apartment with views over the marina, golf course and (if you stand on one leg and lean vertiginously over the 44th-floor balcony) a glimpse of the Palm and the Gulf. Finding a good place fairly quickly at a 37 per cent reduction on the villa rent tells its own story, and was one positive to come out of the whole fraught experience. Another was my wife's face when she saw the Manhattan-style view.
The downsides were legion: the cliff-hanging negotiations with high-pressure estate agents; the imperative to ensure finance was in place at the bank simultaneously with the first cheque landing; the bureaucratic jungle of the Dubai utilities system. Do you really have to produce a three-year old Dewa receipt in order to claim back your refundable deposit? Yes, you do. Then there was the day itself. It began at 8.30am with a crack team of able-bodied Pakistani gentlemen tenderly lifting the first piece of furniture into a truck. It ended at 2am the following morning with the same men, exhausted, hungry and wanting nothing else than to heave the last item into the apartment and go to sleep. We shook hands solemnly at the end, as if we had all by chance survived a fatal air crash.
My body certainly felt as though it had been through a catastrophe as I collapsed on a mattress in a heap of cardboard boxes, dismantled furniture and newspaper wrappings. The thing that made it all bearable was the kindness of individuals: the unfailing optimism of Mr Ali, the Emirati overseer of our removals gang; the security man at the new apartment who spent hours trying to fit a three-metre dining table into a 2.5-metre lift, and succeeded; the labourer from Lahore, a master-tailor by trade, who assured me at the end that I would always be welcome in his country, and left me his mobile in case I wanted a suit made.
It was, all in all, a moving experience, but not one I would like to repeat soon. It's Dubai-style high-rise life for me from now on. @Email:email@example.com