The pace of rent increase in Dubai has slowed down in the last three months, but still a majority of residents are likely to move apartments when their lease comes up for renewal, according to a new report.
“The survey showed that Dubai residents are still very likely to move homes due to continued rent increases. Sixty three per cent of all respondents plan to move to a new home upon their next lease renewal,” MoveSouq.com, a Dubai-based comparison site for home services, said in a report based on an online survey of 200 residents.
It further adds that the proportion of people planning to move was significantly higher among those who faced a higher rate of rent increase in the last year.
“Eighty one per cent of respondents who faced more than a 15 per cent rent increase plan to move to a new home,” the report said.
Another highlight of the survey was that the pace of increase in rents had come down with those renewing their lease less than three months ago facing “smaller” rate of increase than those who renewed their lease 6-12 months ago.
“The proportion of Dubai residents who faced more than a 10 per cent increase in their rent costs was 28 per cent of those who renewed their lease less than 3 months ago, compared to 40 per cent of those who renewed their lease 6-12 months ago,” the company said.
However, the data showed that 82 per cent of Dubai residents said they experienced an increase in their rental costs when they last renewed their rental contracts.
“This quarter's results tally with the overall perception in the market that real estate prices are stabilising. The data shows that Dubai tenants are still facing rent increases with each renewal, however, we see now that the rate of increase in rental costs has slowed down compared to end of last year. It would be interesting to see how the market will behave in the next quarter, but we expect this trend to continue,” said company CEO Bana Shomali.
Global real estate consultancies such as JLL, Knight Frank and CBRE have ruled out rental increases this year compared to 2014, with the possibility of rent-free periods for existing tenants.
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