These will list the number of the landlord or agent and you can quickly call up and register your interest. Remember that the best properties go fast, so be prepared to move quickly when you find a property that you like. If you are struggling or you simply have no time or a very limited window in which to find a property in Dubai, you may be better off engaging the services of an estate agent to help with your search.
Sorting Out Your Rental Contract in Dubai Sorting out your lease on a rental property in Dubai is very important – you have to get the contract right from the word go. Any ambiguity has to be smoothed out, any clauses you’re not 100% happy with have to be cleared up and it is an opportunity for you to negotiate your position to your best advantage. Bear in mind that if you can pay for your rent up front a year in advance you have the best chance of negotiating a very good deal. Think about trying to fix your landlord into a rent cap for three or more years because at the moment, the biggest annoyance for many who live in Dubai is that their rent goes up and up every year. If you know well in advance what you will have to pay each year, so much the better when it comes to planning your life financially speaking! A rental contract really should be looked at by your lawyer before you sign it, and to make sure that it is fair. The contract will likely list which obligations you’re liable for and which the landlord is responsible for. For example, your landlord may be charging you more as he is liable for all maintenance. If you feel you could take on the garden or the basic upkeep of the home, say so and negotiate the price down a bit. Make sure the landlord gives you plenty of notice of any changes to the contract such as rental increases. Make sure you both have a fair notice period.
Ensure that the security deposit is held securely, and that you are 100% happy with the contract and that it is watertight before you sign it. If you’re in doubt about any aspect of the lease contract, ask around and find out what’s normally worded therein. Because you will be tightly bound by this contract, you have to get it right from the very outset. There should be no assumptions made – because assume can make an ass out of u and me! Finally, renting a property in Dubai can be preferable even if you intend living in the emirate for a prolonged period. It will give you the chance to get a proper feel for the place before you commit to buying a property there for example, or before you commit to selling up lock, stock and barrel in the UK. The first real signs that Dubai’s property market is suffering from affordability options and the credit crunch have been revealed The first real signs that Dubai’s property market is not immune to the realities of affordability and the global financial crisis have come to light. In a report from HSBC Holdings PLC, it’s revealed that month on month prices for resale homes fell by as much as 19% in October from September. Their findings relate only to the second homes market, but when you read this news in light of further developments in the property market you begin to see that Dubai’s real estate landscape is changing. For example, developer Emaar has come up with a creative way of extending and diversifying finance options for would-be buyers of new homes.
Having seen its share price fall 79% in less than a year, the company is very keen to keep liquidity in the market that it dominates, no doubt. So, property prices in Dubai are fallings as the market is squeezed – but what does all this mean for the longer-term health of the real estate sector, what does it mean for those who have bought, those who want to rent and those considering an entry into the historically high returning property market in Dubai? The real estate landscape in Dubai has so far seemed to stand alone throughout its relatively short history. It has experienced growth rates far exceeding those almost anywhere else in the world. Demand has been intense, prices have risen extremely sharply, the aggressive investor approach of buying off plan and flipping before completion seems to have been invented specifically for Dubai. And on the rental side of the market, demand and pricing have also skyrocketed. These impressive developments were acceptable a few years ago when you could seemingly make money from any property market – but in the last twelve months or so the wider world has looked on incredulously. Sure, there is still unprecedented demand in Dubai for accommodation – it has the fastest growing population in the world. However, at some point there’s a lesser talked about but critically significant concept that has to come in to play – and it is a concept that seems finally to have had an impact in Dubai. The concept is ‘affordability. ’
Whilst the mega rich can still afford ever increasing prices in a market as wholly splendiferous as Dubai’s, a) they may not want to and b) what about the rest of us – i. e., those who are moving to the emirate to live and work and who have more modest means and existences? It is our firm belief that affordability has become an issue in the market, and that nothing short of a negative readjustment of property prices to bring them, (and keep them), in line with median affordability is acceptable if Dubai is to continue to have a healthy real estate sector.
Again in our humble opinion, this is no bad thing for the market! Sure, it stops the speculator stripping Dubai’s property sector of profits – but then the government in Dubai was already in the process of putting barriers in the way of such an aggressive approach anyway. Dubai’s government is far more likely to want to see a healthy, robust and sustainable market sector bringing them in regular income with which they can pay back their apparently large international loans. Such a scenario is preferable to having a real estate landscape dominated by the boom bust cycle that we endure in the UK, and the government having to go cap in hand to the likes of oil rich Abu Dhabi for some sort of loan funding bail out. Therefore the next issue to look at is how Dubai is bringing affordability back in to the market. The emirate has been stung by the global restriction on lending – those who want to buy and are in a favourable position to raise a mortgage are being asked to stump up significantly larger deposits. For some this is an option, but Emaar is aware that for many others it is just not possible. Therefore they have been incredibly quick in reacting to the issue and have brought a couple of solutions to the table for buyers of their properties. The first option sees them effectively deferring payment of 25% of the property’s value.
A buyer then raises a deposit and seeks a mortgage for the remaining 75%, and has 5 years in which to pay off the 25% in lump sum installents directly to Emaar. This can work for those on a strong and fixed contract who know that over the 5 year period they will have access to the cash needed. For others there’s a rent to own option – they can rent a given property, and within the first ten months if they decide to then buy that property a) the price remains fixed for them from the date they first moved in and b) the rental paid out goes towards paying for the property. It’s a sort of try before you buy – try the property, try the market, try the mortgage lenders.
You can be cynical about Emaar’s moves if you want, but at the end of the day they are in the business of developing and selling property – they have reacted very quickly to changing market conditions and attempted to head them off at the pass. Ideally Emaar and all the other developers will take a closer look at their pricing and face the reality that affordability will become a more and more pressing problem for their potential buyers. Dubai’s market basically needs to see the greed and corruption stripped from it – and again, the government is doing all it can to enable this to happen. Sweeping arrests have been made and investigations are ongoing to stamp out alleged corruption offences, what’s more the government is looking at creating more barriers to speculative investment asset stripping practices. Whilst they probably don’t need to at the moment, it will be good for the long-term health of the market if they get these barriers in place now. If you’ve recently bought property in Dubai you may not be able to reap a massive dividend from reselling it – but you have bought in a location where there is unprecedented and ongoing demand.
This bodes well if you need an exit strategy or if you want to raise rental income from your property. If you have yet to buy – well, just as in any other market in the world right now, you’re in a great position to negotiate yourself a bargain. And finally, if you’re in the market for a rental property – in time it is possible that greedy landlords will be forced to take a reality check as well. Maybe the underlying value of their property will fall and they’ll just be grateful to make something in the form of rent from their investment – highly unlikely, but we can hope!