Expats are paying lower rents for homes in Dubai as the cost of letting property keeps falling.
Rents are close to 11% less than the average two years ago and nearly 7% lower year on year, according to research by ValuStrat, a specialist research firm.
Tenants are paying 6% less year-on-year for an apartment and the price of renting a villa is 11% down over the same period.
The good news is rents are expected to fall even further for at least a year as the Dubai house markets rebalances from years of falling prices and too many new homes for sale.
“More apartments and villas will hit the market as delayed development finally complete over the coming months,” said a ValuStrat spokesman.
Over optimistic developers
“Many developers were too optimistic about how many units they would sell and a lot of inexperienced builders badly managed their projects.
“This is good news for tenants who should see rents keep falling while the market continues to sort itself out.”
The report explained that house prices in Dubai were about to bounce back after several years of decline and market readjustment.
April 2015 was the first time home prices had stopped declining since the ValuStrat index started in 2014.
Buyers and investors have started to catch up with a glut of housing that has flooded the market in recent years.
Home sale regulation
The government has also introduced tough mortgage and house building regulations to stop speculators buying offplan properties and selling them on before they are completed at a profit.
House prices fell by an average 10.5% in the year to the end of April 2016.
However, the rate of decline slowed to 2.5% in the first quarter of the year.
“Dubai home prices are stable and buyers are ready to get their wallets out as they believe that prices will increase in the long term and buying is cheaper than renting,” said the ValuStrat spokesman.
The average in the city is selling for £2,670 a square metre, while villas fetched £2,755 a square metre.
Property Investing in Dubai
Dubai is heading towards becoming a potential investors dream with the fall in property prices. Experts are keeping an eye on the developments in Dubai and the surrounding region for opportunities.