Most Dubai residents – up to 82 per cent – faced a rental increase during their last contract renewal, according to a new survey.
While 28 per cent saw rents rise more than 15 per cent, 23 per cent witnessed an increase of between six to 10 per cent, 18 per cent said rents went up by one to five per cent and 13 per cent faced rental growth of between 11 to 15 per cent.
However, tenants who renewed their lease in Q1 2015 faced a smaller rate of increase than those who renewed their lease six to 12 months ago, the survey by comparison site MoveSouq.com found.
For instance, among respondents who renewed their lease in 2014, 40 per cent witnessed more than a 10 per cent rise in rents, while 14 per cent saw no change in their rents.
However, among residents who renewed their lease less than three months ago, just 28 per cent of residents faced more than a 10 per cent increase, while 21 per cent said that their rents remained the same.
MoveSouq.com CEO Bana Shomali said, “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.”
The survey also found that up to 63 per cent of the respondents plan to move to a new house before their next lease renewal.
The proportion of people planning to move was “significantly higher” among those who faced a higher rate of rent increase in the last year; 81 per cent of respondents who faced more than a 15 per cent rental rise aim to move homes, the report found.
Residential rents in Dubai rose sharply in 2013 and 2014, but are expected to stay the same or decline by up to 10 per cent this year, in line with the overall property market, according to property consultant JLL.
JLL’s latest Q1 report found that compared to Q4, 2014, rents remained flat for apartments and villas, while on a year-on-year basis, apartment rents rose nine per cent and villa rents saw a two per cent growth.