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The first half of 2024 especially has marked a transformative period for the industry. From major updates to government processes, to new regulations and even some unusually intense weather events that impacted perceptions of the city.
Despite the challenges, there are positive signs. Rental values have risen 20% year-on-year. Prices now sit 10% above previous peak levels. This reflects renewed confidence from both tenants and landlords. Our company alone logged AED 110 million in rental transactions in Q2!
An End to ‘COVID Era Pricing’
Dubai rents have climbed steadily over 3 years. Yet the RERA Rent Calculator remained anchored to lower ‘COVID-era’ rates. This allowed tenants to continue renewing leases below prevailing market prices.
So the 2022 update to the Calculator provoked strong reactions with some tenants now facing upwards of 20% rent increases.
Undoubtedly disruptive for some in the short term. But also a relief for many mid-market landlords who struggled to realize returns on assets. By 2025 renewals, we should reach an equilibrium.
Tenants Take a Long-Term View
An effect of the revised Calculator is that tenants now evaluate longer-term residency, especially those here 5+ years wanting stability. This has shifted some renters towards buying, as mortgage payments can cost less than rising rents.
Others still renting have expanded searches to peripheral areas with potential - like Dubai South . We also see more multi-year contracts, flexible payment terms.
Know Your Tenancy Rights
The 2022 changes sparked tenants to grasp exact tenancy rules and protections better too. Gone are the days when landlords could easily terminate agreements without cause. Though some still try illegal tactics if they feel rents are too low.
Tenants have wised up on legal recourse available. We always seek fair dispute resolution. But any landlord attempting improper evictions or fee hikes hurts themselves most.
Perspective from the Rains
Any first-half 2024 recap must include April’s record storms. While Dubai rebounded quickly, questions linger regarding infrastructure resilience and community safety plans.
In the aftermath, tenants conduct more diligent home inspections focused on build quality and drainage. Understandably, these factors have become a higher priority.
What’s Next for H2 2024
We think several trends will perpetuate H2 rental growth:
- DLD and portals tackling fake listings to improve consumer trust
- Global uncertainty enhancing UAE’s appeal as a safe destination
- More supply incoming but not enough to meaningfully cut prices
- Sustained rental growth seems inevitable as Dubai cements itself as a long-term home for people worldwide.
In Closing
The first half of 2024 has been a transformational period for Dubai’s property arena. With major regulatory reform, shifts in tenant behavior and rights awareness, plus unexpected weather highlighting infrastructure considerations - the market has entered a new chapter defined by balance and sustainability.
As we enter H2, the future remains bright. Continued growth is forecast, underpinned by Dubai’s strengthening status as a global hub and stable haven for newcomers and investors alike.
