Each day I and other seasoned Brokers face the same questions:
How is the market? Is there an oversupply?
I always stand by the saying “Don't bring me problems, bring me solutions.” So what can we do together to help solve some of the issues we are facing today in the market.
Here is one of my suggestions which we can all work on for mutual benefit.
Oversupply of property, in most people's opinion, is the reason why the current market is slow. Currently, on Dubai Statistics, it shows there are 3,227,762 residents in Dubai (expat and Emiratis). Let's say, for argument's sake, 50% are labourers. (the last report published was in 2016 and listed 500,000 of residents were labourers).
That leaves 1,600,000 living outside of staff accommodation. As of today, there are 165,494 apartments and 38,113 villas/townhouses, totalling 203,607 completed properties in all of Dubai (data from propertymonitor.ae)
This means there are nearly 8 residents for every property constructed.
Even if half of these are children or low-income sharers it still clearly shows that we do not have an oversupply if we look at averages.
So why are people sharing? As we know in Dubai you need to pay your rent in postdated chqs. This stemmed from the days of a serious undersupply 15 years ago. In the current market 4 chqs is not uncommon so I will use this as an example.
We have many one bedrooms for rent for around AED60,000 currently on the market.
To move in we ask for 3 months rent, in this case, AED15,000, plus security deposit and commission AED6,000, DEWA, DU and Gas deposits AED3000, furniture if required.
That's a total of AED24,000 needed before any furniture is purchased.
You can rent many en suite master bedrooms for an average of AED5,500 per month including wifi, tv and DEWA, often sharing kitchen and living facilities with 4 or more others.
If landlords adapt to the current climate and start accepting 12 chqs it benefits so many areas of the market:
The Tenant will only pay AED5,000 per month for there own 1 bedroom apartment, AED5,500 with bills.
The Landlord gets a tenant! and minimises void periods.
With access to credit reports, online banking and property management companies this is now an option.
If you would like to list your property for sale or for lease please get in touch with me by replying to this email.