# Dubai Housing Market - Upward Trend or Temporary Fluctuation?



## babyfleur (Mar 4, 2013)

The housing market seems to have picked up (based on recent feedback I've recieved from a few agents) in the last couple months. Rents have increased I hear by around 20K. Is this the norm? is it based on season? I'm wondering if they'll go back down in a few months or if the market in general is on an upward trend. I just don't want to go into a long term lease only for prices to go back down in a few months.


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## Bigjimbo (Oct 28, 2010)

ymurugu said:


> The housing market seems to have picked up (based on recent feedback I've recieved from a few agents) in the last couple months. Rents have increased I hear by around 20K. Is this the norm? is it based on season? I'm wondering if they'll go back down in a few months or if the market in general is on an upward trend. I just don't want to go into a long term lease only for prices to go back down in a few months.


Going up.


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## md000 (Dec 16, 2008)

Bigjimbo said:


> Going up.


and up.


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## m1key (Jun 29, 2011)

But not necessarily based on demand in many areas...just greed.


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## Bigjimbo (Oct 28, 2010)

Regardless.


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## babyfleur (Mar 4, 2013)

Thanks for the feedback...


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## fcjb1970 (Apr 30, 2010)

m1key said:


> But not necessarily based on demand in many areas...just greed.


I have no love for landlords here, but hey if you are investing in a property the entire point is to make as much money off of it as possible. You really cannot fault a person for trying to get the most he can if the market will bear it.


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## Canuck_Sens (Nov 16, 2010)

You should negotiate at all times the price with your landlord. It is unrealistic a raise of 20K AED per year really. We do not need another collapse and some landlords are trying to game the system by giving fake reasons to expel tenants so that they can increase rental prices.


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## babyfleur (Mar 4, 2013)

Canuck_Sens said:


> You should negotiate at all times the price with your landlord. It is unrealistic a raise of 20K AED per year really. We do not need another collapse and some landlords are trying to game the system by giving fake reasons to expel tenants so that they can increase rental prices.


This is sad... there should be some regulation against this.


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## m1key (Jun 29, 2011)

fcjb1970 said:


> I have no love for landlords here, but hey if you are investing in a property the entire point is to make as much money off of it as possible. You really cannot fault a person for trying to get the most he can if the market will bear it.


I have no argument in trying to make a decent return on your investment, but 45k increase in less than 10 months on a 115k property. There are quite a few available in the area as well. That is unrealistic and massive profiteering. The problem is, some muppet will pay it, and drive up prices further for the rest of us.


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## Stevesolar (Dec 21, 2012)

With the proposed new limits on mortgage loan to value percentages and the perceived improvement in the region's economic outlook - I can see a steep rise in rental rates over the next 12-24 months.
I reckon rents will be 30% higher than current rates by this time next year (especially for desirable villas and apartments in key locations).
Cheers
Steve


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## saraswat (Apr 28, 2012)

They are going back up .. and it seems like it's the start of the trend. But the market here is far too dependent on external factors rather than internal, which makes for forecasting the length/health of the trend extremely hard to predict. 

To me it just seems like, investors who stuck it through the dreadful crash are finally grasping at any positive signs towards recovery, trying to recoup their losses as soon as possible, even though the aforementioned signs aren't essentially strong/dependable...


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## Fletch1969 (Nov 12, 2011)

ymurugu said:


> This is sad... there should be some regulation against this.


I thought there was. Hmmm..

I'm a landlord myself in the UK and its absolutely true that I'm dong it to make money. However, some landlords here are trying to break the law whilst making cash. Not been here anywhere near long enough to guess what the rentals will go to, but the city is getting busier again from what I'm seeing..


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## Canuck_Sens (Nov 16, 2010)

ymurugu said:


> This is sad... there should be some regulation against this.


tell me about it, one of my folks at work got a letter from his landlord stating that he is moving back there with his family FAT CHANCE!!!

You just LOL cuz the guy has 3 or 4 properties!!!!! 

My co-worker sent a letter back saying " I am moving next door and if you are not here be prepared fora law-suit!!!!"

Unfortunately there is no level playing field...there is something in the gut to raise prices to astronomic levels. Everybody loses in the long run if you think about it.


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## mechatronic86 (Apr 23, 2013)

m1key said:


> But not necessarily based on demand in many areas...just greed.


if demand is not high prices will go down like what happen during recession... it s main market law



fcjb1970 said:


> I have no love for landlords here, but hey if you are investing in a property the entire point is to make as much money off of it as possible. You really cannot fault a person for trying to get the most he can if the market will bear it.


landlords dont steal money, if they propose a higher price and tenant accept if course they raise the price, until demand will go down and vacancy rate will increase... 



babyfleur said:


> This is sad... there should be some regulation against this.


you cannot regulate the market, until demand is high with increasing prices u cannot stop this. a way to slow down is competition in prices of different places and increase vacancy rate by building more and more...


Stevesolar said:


> With the proposed new limits on mortgage loan to value percentages and the perceived improvement in the region's economic outlook - I can see a steep rise in rental rates over the next 12-24 months.
> I reckon rents will be 30% higher than current rates by this time next year (especially for desirable villas and apartments in key locations).
> Cheers
> Steve


yep this will slow down house prices but bank protested, government gave up and they just limited very low the amount of loan that is still too big, speculation will not be pushed down cos u can buy house too easily even with small amount cash...market remain fragile with 80% loan from bank


in dubai only expensive places are going up in price, in cheap places the increase is less... as quality of living,income,taxes,cost of living,ecc ecc prices in dubai should be more high and high...


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## woodlands (Jan 13, 2010)

The new mortgage law should be out by Sep. it will cool things down a bit for a few months. Longer term if these guys (authorities) don't screw it up, prices for properties will rise over 100/250%. The rents however are going beyond affordability levels and should flatten. We are likely to see a yield compression temporarily. The howling protests at rent increases are symptomatic of lower middle class' lack of savings cushion and poor income diversity/growth prospects. And that's the crux of the impediment.

The problem with the economy here in Dubai that there are very few quality jobs (0.5 mm usd plus). At the same time investors will demand more returns for higher risk while affordability is low. Something is gotta give. It can't be hk, ny, London as the wealth is heavily concentrated among very few guys whose employees get peanuts. Monopolies mean that growth doesn't change this dynamic. A lot needs to change for values to rise beyond aed 4000/sq ft.


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## TallyHo (Aug 21, 2011)

I can see why you're not very popular on here. I completely understand what you're saying but if you want to win sympathy you need rephrase some of your terminology.

Dubai is a very odd housing market compared to other places. A few reasons why:

1. Highly transient with 100K+ new residents arriving annually, replacing older residents leaving. These new residents have to move into something and aren't locked into existing leases that have legally protected rent increase limits.

2. Hugely popular investment destination for affluent people from a limited range of unstable countries in the Middle East / Central Asia / Pakistan. They offload their wealth into Dubai properties as a safe haven and don't care about renting out the properties and are content to leave them empty for years on end. Quite a lot of money is laundered through Dubai this way. 

3. Unusual Arab mindset that refuses to yield to current market rates and will rather keep property empty for months/years than to accept a lower rent. This is cushioned by that some locals received loans for investment properties and payment is based only on whether there is a tenant or not.

4. Growing number of residents now own their own property, which reduces the supply of rental properties in the desirable areas.

5. 'Tax free' makes people feel they have more disposal incomes than in their home countries and even with higher rents eating into your income you're often still better off. An old rule of thumb is not to spend more than 1/3 of your post-tax income on rent. In Dubai that would be your entire income and people carry over the same rule of thumb when they should reduce it to between 1/6 to 1/4 of the income. 

6. Last but not least is the undeniable vanity aspect. Too many people are willing to pay much higher rents to be in certain areas rather than 20 minutes further out where similar apartments can be half the price. I.e. Marina versus Sports City or Downtown versus Silicon Oasis. 





woodlands said:


> The new mortgage law should be out by Sep. it will cool things down a bit for a few months. Longer term if these guys (authorities) don't screw it up, prices for properties will rise over 100/250%. The rents however are going beyond affordability levels and should flatten. We are likely to see a yield compression temporarily. The howling protests at rent increases are symptomatic of lower middle class' lack of savings cushion and poor income diversity/growth prospects. And that's the crux of the impediment.
> 
> The problem with the economy here in Dubai that there are very few quality jobs (0.5 mm usd plus). At the same time investors will demand more returns for higher risk while affordability is low. Something is gotta give. It can't be hk, ny, London as the wealth is heavily concentrated among very few guys whose employees get peanuts. Monopolies mean that growth doesn't change this dynamic. A lot needs to change for values to rise beyond aed 4000/sq ft.


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## Mr Rossi (May 16, 2009)

TallyHo said:


> if you want to win sympathy


I don't think trolling Walter Mitty types come on the internet to win sympathy.


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## m1key (Jun 29, 2011)

mechatronic86 said:


> if demand is not high prices will go down like what happen during recession... it s main market law
> 
> 
> landlords dont steal money, if they propose a higher price and tenant accept if course they raise the price, until demand will go down and vacancy rate will increase...
> ...


You must either be new to Dubai, or a landlord.


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## Tropicana (Apr 29, 2010)

TallyHo said:


> that refuses to yield to current market rates and will rather keep property empty for months/years than to accept a lower rent. .


Just one of the many reasons why its not accurate to claim the rental market is running on a "free market" principle, and hence rising rents are normal


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## TallyHo (Aug 21, 2011)

I remember walking around JBR one night, during the peak of the boom when people were paying close to 200,000 for a two-bedroom flat, and noticing that there were entire towers completely devoid of life. I was told that whole towers were owned by certain property companies who withheld releasing the apartments for rent in order to keep rental prices in the other towers as high as possible.

Whether this is a true story or not the actual vacancy rate in Dubai has always been quite high compared to the demand for housing. It's certainly not a 'free market' here.





Tropicana said:


> Just one of the many reasons why its not accurate to claim the rental market is running on a "free market" principle, and hence rising rents are normal


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## woodlands (Jan 13, 2010)

Mr Rossi said:


> I don't think trolling Walter Mitty types come on the internet to win sympathy.


If you were in Zuma last weekend you would have seen me with Lionel Ritchie. Why don't you do this. Go to Zuma in DIFC and ask what the bill was for Lionel Ritchies table . If he tells you 7150 aed, you would know that if I was to be obnoxious your social status would probably be not good enough to even be my valet. I couldn't even be bothered to insult you.


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## Jynxgirl (Nov 27, 2009)

Were you this big of an ******* before you moved to Dubai?


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## m1key (Jun 29, 2011)

woodlands said:


> If you were in Zuma last weekend you would have seen me with Lionel Ritchie. Why don't you do this. Go to Zuma in DIFC and ask what the bill was for Lionel Ritchies table . If he tells you 7150 aed, you would know that if I was to be obnoxious your social status would probably be not good enough to even be my valet. I couldn't even be bothered to insult you.


Is anybody supposed to be impressed with any part of that?


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## woodlands (Jan 13, 2010)

Jynxgirl said:


> Were you this big of an ******* before you moved to Dubai?


Can't recall insulting anyone on the forum. While I have been called me smitt, bald, ugly, poor, unemployed, idiot etc etc.
Your question perhaps answers itself. :focus:
On wannabe Wall Street ... Ouch I wish I could answer that one without revealing my identity. If you have been reading finance news in UAE, you would have read my name many times . but it's irrelevant . The topic is Dubai real estate. Open a separate thread if you want to send insults my way.


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## Bigjimbo (Oct 28, 2010)

woodlands said:


> The new mortgage law should be out by Sep. it will cool things down a bit for a few months. Longer term if these guys (authorities) don't screw it up, prices for properties will rise over 100/250%. The rents however are going beyond affordability levels and should flatten. We are likely to see a yield compression temporarily. The howling protests at rent increases are symptomatic of lower middle class' lack of savings cushion and poor income diversity/growth prospects. And that's the crux of the impediment.
> 
> The problem with the economy here in Dubai that there are very few quality jobs (0.5 mm usd plus). At the same time investors will demand more returns for higher risk while affordability is low. Something is gotta give. It can't be hk, ny, London as the wealth is heavily concentrated among very few guys whose employees get peanuts. Monopolies mean that growth doesn't change this dynamic. A lot needs to change for values to rise beyond aed 4000/sq ft.


Despite being factual with input on this forum, you are incredibly boring. You sound like the wall st wannabe tax exile, with shoulder pads, perm, and a collection of questionable german films. The kind of idiot who drops pop icons names from 40 years ago....


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## m1key (Jun 29, 2011)

Is Woodlands that Fatima Suhail that writes in to 7 Days on a daily basis?


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## Bigjimbo (Oct 28, 2010)

woodlands said:


> Can't recall insulting anyone on the forum. While I have been called me smitt, bald, ugly, poor, unemployed, idiot etc etc.
> Your question perhaps answers itself. :focus:
> On wannabe Wall Street ... Ouch I wish I could answer that one without revealing my identity. If you have been reading finance news in UAE, you would have read my name many times . but it's irrelevant . The topic is Dubai real estate. Open a separate thread if you want to send insults my way.


Done.

Joys of an open forum.


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## Fat Bhoy Tim (Feb 28, 2013)

m1key said:


> Is Woodlands that Fatima Suhail that writes in to 7 Days on a daily basis?


I saw her spouting more pointless garbage on the Emirates 24/7 facebook page. She gets around that girl.


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## m1key (Jun 29, 2011)

Fat Bhoy Tim said:


> I saw her spouting more pointless garbage on the Emirates 24/7 facebook page. She gets around that girl.


I thought I was a grumpy old git, but she is unbelievable (no pun intended!). I hope her hubby has noise cancelling headphones...


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## Fat Bhoy Tim (Feb 28, 2013)

m1key said:


> I thought I was a grumpy old git, but she is unbelievable (no pun intended!). I hope her hubby has noise cancelling headphones...


Most of my best work on the 7Days letter page has never made it past the censors. Admittedly most of it consists of 'questioning' the powers-that-be, but a fair bit of it is directed at her.

I suspect he's already gone and blown out his ear drums, using any means available to him. 

Hang tight budy, you'll die - one day :fingerscrossed:


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## Byja (Mar 3, 2013)

Bigjimbo said:


> You sound like the wall st wannabe tax exile, with shoulder pads, perm, and a collection of questionable german films.


...and a perfect business card...


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## Mr Rossi (May 16, 2009)

Fatima is a staff login used to generate page impressions for the site.


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## Jumeirah Jim (Jan 24, 2011)

Being dull and back to the OP

You do know there are rent cap laws in DXB? Landlords can only increase rents in line with the (usually not working) RERA online calculator of "average" rents for "similar" properties. 

The calculator sometimes churns out random results but is generally in line with the pre-calculator (about 2010) position of max 5-7% increases year on year. 

From what I've heard only well regarded areas of DXB are increasing in price. New developments inland especially are getting cheaper. Not that they'd be most people's first choice. DXB is however becoming (like more developed places) divided between good/bad places to live.


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## woodlands (Jan 13, 2010)

m1key said:


> I have no argument in trying to make a decent return on your investment, but 45k increase in less than 10 months on a 115k property. There are quite a few available in the area as well. That is unrealistic and massive profiteering. The problem is, some muppet will pay it, and drive up prices further for the rest of us.


Where did that happen?


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## mechatronic86 (Apr 23, 2013)

m1key said:


> You must either be new to Dubai, or a landlord.


both but i live in and not rent out the apartment..


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## Bigjimbo (Oct 28, 2010)

woodlands said:


> Where did that happen?


What? Something you don't know about in exhaustive, boring detail?


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