x Abu Dhabi, UAESaturday 22 July 2017

Dubai residents searching for cheaper properties as rents rise

As rents increase across the emirate, prospective tenants are searching for property in more affordable areas.

Areas such as Dubailand, Dubai Sports City and Jumeirah Village Circle are becoming more popular among potential tenants and buyers, according to statistics from propertyfinder.ae. Satish Kumar / The National
Areas such as Dubailand, Dubai Sports City and Jumeirah Village Circle are becoming more popular among potential tenants and buyers, according to statistics from propertyfinder.ae. Satish Kumar / The National

DUBAI // More tenants are searching for homes in less expensive developments as rents increase.

Areas such as Dubailand, Dubai Sports City and Jumeirah Village Circle are becoming more popular among potential tenants and buyers, according to statistics from propertyfinder.ae.

The website, a portal to connect residents with brokers and agents, analysed more than two million visits to the site in the past three months and compiled a list of the most searched-for developments.

The property agency said the report was a good indicator of current sentiment.

“It’s a barometer of the market,” said Bharat Kumar, the marketing director for propertyfinder.ae. “This is an indication from a consumer point of view, of what people are interested in.”

The most popular development was Dubai Marina, which received 18.67 per cent of views among those looking to buy property, and 18.41 per cent of views among those looking to rent.

In terms of the top 10 rental locations, Dubai Sport City, Jumeirah Village Circle and Dubailand were sixth, seventh and eighth, respectively.

In terms of the top 10 buying locations, Dubailand, Jumeirah Village Circle and Dubai Sports City were fifth, sixth and eighth.

In the same quarter last year, none of the three developments figured in the top 10 in either category.

“Each quarter this year they have crept up the ladder,” said Mr Kumar. “They are more affordable in both sales and rent. They offer better value for money than an equivalent property elsewhere.

“Over the past 12 to 18 months, rent and sales prices have gone up, meaning that people are looking for better alternatives.”

In Abu Dhabi, Al Reem Island was the top search for people looking to buy, with 28.1 per cent of page views, followed by Al Reef and Al Raha Beach.

The ranking remains largely unchanged since last quarter, when 2,500 new units were delivered in the three developments.

In terms of rental-related searches, Al Reem Island was in top place, with 18.4 per cent of views, followed by Khalifa City and Al Reef.

Mario Volpi, managing director for Prestige Real Estate, said the relatively lower rent and sales prices for the most-searched areas in Dubai were due to a lack of amenities compared with other areas.

“Perhaps calling them building sites is a little too rough, but certainly not everything is there,” he said.

“In terms of Jumeirah Village Circle, the community centres aren’t there and pools aren’t there. It’s still a work in progress. Clearly the rents are going to be slightly cheaper there because people are going to have to sacrifice some amenities.

“If people can’t afford to live where they’re currently living, they’ll need to search for cheaper areas, and off we go again.

“As developments mature, more things will come in, and prices will rise.”

Changes were announced for the rent cap in Dubai on Saturday by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai.

Landlords will now be allowed to raise rents by 5 per cent if the property is being rented for 11 per cent below the current market rent, as opposed to the previous requirement of 26 per cent below market rate.

Rents in some areas of the city have risen by more than 30 per cent, according to a report this year by CB Richard Ellis.

Mr Kumar said residents were concerned about the prospect of sharp rent increases as prices increase to match current market values.

“Renters are obviously going to be concerned with rent increases that are higher than they would like,” he said. “We have seen communities which have increased quite heavily. There’s some nervousness about this.”

The report found that the most commonly searched rental bracket was Dh80,000 to Dh100,000, replacing the Dh60,000 to Dh80,000 bracket that was most popular last year.

Mr Kumar said it was not necessarily a sign that people were happy about the rental increases.

“It is not that people are prepared to pay more, or are necessarily happy about it,” he said. “It is just that rents have gone up for the same types of properties, and people have acknowledged that.”

mcroucher@thenational.ae