The pandemic has changed the lives of many people. Tenants and landlords alike are now less inclined to commit to yearly contracts
UAE - Tenant enquiries for short-term or month-by-month rentals for residential units is an emerging trend in Dubai as the market recovers from the Covid-19 pandemic setback.
A real estate brokerage reported that during the post-lockdown phase, it has been receiving many enquiries from residents looking to rent units on a short-term basis — “so much so that it prompted us to open up a short-term lettings department”.
Attributing the reason behind this new trend to job losses or financial strains, brokerage firm Allsopp & Allsopp said the pandemic has changed the lives of many people — and tenants and landlords alike are now less inclined to commit to yearly contracts.
“We have noticed that tenants are looking into their options, making sure they are safe in their jobs before committing to a tenancy contract where they are locked in for a year,” said CEO Lewis Allsopp.
“Landlords are becoming more inclined to let their property short-term for some of the same reasons. They are looking for flexibility with their property and, in some cases, steering away from a lock-in a contract where a year's notice needs to be given before they can sell the property,” Allsopp said.
“Pre-Covid-19, we were seeing more of a trend to increase cheque payments and the lockdown accelerated that. Some owners are now asking for fewer cheques again, but overall, more owners are appreciating that they need to offer increased cheque payments. Gone are the days when companies paid for rent in one cheque. In, 2021 so, far we have seen one cheque rental payments decrease by 28.3 per cent compared to the beginning of 2020,” the brokerage said.
Data shows a slight rental price increase, especially in higher-end properties. “We rented out a five-bedroom Garden Home on Palm Jumeirah in the second quarter last year for Dh 290,000. This month, a five-bedroom Garden Home was rented out for Dh550,000 --- a 9 per cent increase,” Allsopp said.
The brokerage reported that the demand for high-end luxury homes has increased. For instance, Palm Jumeirah villas are now being rented out even before listings get a chance to go live on property portals or within seven days if they do go live.
“As a result of the Covid-19 lockdown, the rental market suffered — viewings were non-existent and tenants found themselves in favour of renewing rental contracts as opposed to moving in such uncertain times. This led to a drop in demand and therefore a drop in average rental prices across Dubai. However, in certain communities, we started to see slight increases in the average rental property price,” he said.
Citing an example, he said a two-bedroom apartment in Silverene Tower A in Dubai Marina was renting for Dh100,000 in May of 2020 compared to Dh125,000 in January 2021.
The brokerage also reported an increase in landlords receiving the asking price for their properties.
“In February 2020, 22 per cent of landlords achieved the asking price for their property compared to 37 per cent in February 2021. This is encouraging, considering that there has been such an increase from before lockdown even began. Those tenants who are not yet ready to enter the market as a buyer are still looking for a property to call home,” the brokerage said in its statement.
“Some residents are at the start of their Dubai journey but are willing to pay the asking price for a property that ticks their boxes and that they can see themselves living in for at least a year.
After lockdown, we saw a real increase in demand for villas and townhouses providing some outdoor space — which was no surprise after people emerged from their apartments, where they felt as though they had little space and had a new-found appreciation for the outdoors and fresh air,” Allsopp & Allsopp said.
0 comments