Estate agent Charlie Shetliffe has worked in Dubai for five years and has never seen the rental market this busy.
Clients are eager to snap up townhouses and villas – particularly in the city's desert suburbs – as quickly as possible.
The legacy of remote working is a major factor, with many professionals now splitting their working week between the office and home.
Mr Shetliffe has seen the cost of renting rise amid the economic recovery, which the latest industry reports confirm.
Haus and Haus
“I’ve never seen the market like this at any stage of the past five years,” said Mr Shetliffe, senior leasing consultant with Haus and Haus.
“We don’t even need to advertise the properties online anymore because there’s so many people already on the waiting list ready to go as soon as something becomes available.”
The National spent an afternoon with Mr Shetliffe as he showed clients around properties in Dubai’s Jumeirah Golf Estates.
A typical two-bedroom villa that cost Dh160,000 ($43,500) just six months ago here now fetches north of Dh200,000, he said.
A larger four-bedroom villa will now set you back Dh320,000, when six months ago you would have expected to pay Dh270,000.
“We’ve seen a huge increase in demand for villas and villa communities compared to apartments recently,” he said.
“This is largely down to people working from home during the pandemic who wanted to have extra space," Mr Shetliffe said.
“Outdoor space, like a garden, is more in demand than ever as well, because people were feeling cramped spending so much time in their apartments.”
While the increase in the cost of renting in Dubai is good news for landlords, it is obviously less so for those who rent.
Mr Shetliffe admitted there are challenges trying to find a happy medium between landlords trying to make the most of the boom in the market and would-be tenants hoping to find a new home on a limited budget.
“There’s no doubt it’s a landlord’s market right now but they still have to make sure they are not too greedy and end up asking for too much,” said Mr Shetliffe.
“At the end of the day, tenants still have a budget they cannot exert beyond a certain point.”
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Suburbs vs town: Apartments see more modest rent rises
The cost of renting overall is on the up - but the increases are far more modest when you look at the city-wide average.
Third-quarter rental data from ValuStrat, released in early October, painted a more measured picture than many agents gave.
The average villa landlord asked for 14.1 per cent more in rent in Q3 2021 than they did in the same period in 2020, while the average apartment rent rose by just 2.6 per cent. ValuStrat said average prices were significantly more affordable than during the spike seen in 2013-14, after Dubai won its Expo 2020 bid.
Jumeirah Village Circle (JVC) is the most searched for location in Dubai by people looking for budget-friendly apartments, according to a Q3 report from property portals Bayut and Dubizzle.
The average cost of a two-bedroom apartment there has risen from Q2 by less than five per cent, from last year, to Dh62,000.
The increase in cost for a one-bedroom flat has risen by just over one per cent in JVC to Dh43,000.
Dubai Marina remains the most popular location for a luxury apartment according to the report, with prices increasing from six to 12 per cent across the board.
The average cost of a one-bedroom apartment in Dubai Marina is Dh67,000, with two-beds going for Dh100,000 and three-bedrooms fetching Dh156,000.
Some areas have seen no increase in rental prices at all such as Bur Dubai, where the average cost of one and two-bedroom apartments is the same in Q2, at Dh45,000 and Dh66,000 respectively.
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'Landlords shouldn't be too greedy'
Mr Shetliffe was showing three-bedroom and four-bedroom villas to potential tenants when The National tagged along.
He is also accompanied by an agent for the landlord, hoping to strike a deal and get the property off the market.
“The landlords often have a lot of agents in their ears,” he said.
“I’ve been in the situation where the tenant offers to pay the asking price and you think it’s a done deal.
“Then the very next day you’re told someone has come in offering more money.”
Another sign the pendulum is swinging in the favour of landlords is a renewed demand for rent to be paid by one annual cheque, rather than numerous cheques throughout the year.
It was not uncommon for some landlords to accept 12 monthly cheques in recent years, allowing tenants to stagger rent payments throughout the year.
Not anymore, according to Mr Shetliffe.
“In the last few years the landlords were accepting multiple cheques and some were offering a free month of rent, which meant you would get 13 months for the price of 12 as an incentive,” he said.
“Now because of the demand it’s going back to a lower number of cheques per year.
“Some people are still paying 12 cheques but it’s happening a lot less now.”
Mr Shetliffe said there had been a noticeable increase in people relocating to Dubai in recent months, which he put down to a renewed confidence in the region due to the successful handling of the Covid-19 crisis.
'A good community and a school nearby'
New arrivals such as Leo Zambitte, a marketing manager who is moving from London with his wife and daughter, are looking for a villa in the suburbs.
"My company wants me to move here because we do a lot of business in the region and it’s easier to manage that from here,” he said, after being shown around.
“We’re looking for a place that’s the right size for us with a good community and school nearby.
“It has to be reasonable though, as we don’t want to bankrupt ourselves.”
Another estate agent said the demand for townhouses and villas exploded during the pandemic, which led to an exodus of people moving from apartments to bigger properties in the suburbs of Dubai.
“People started to move to cost-effective villa communities outside of the centre of Dubai in the pandemic,” said Leigh Wilmot, senior property consultant with Treo Homes.
“This has resulted in the availability of townhouses and villas reducing, hence the price increase that we are seeing now.”
Mr Wilmot works in the Town Square community in the outskirts of Dubai on Al Qudra Road.
Renting a three-bedroom townhouse there would have cost Dh80,000 last year. The same type of property is now going for Dh105,000.
Four-bedroom townhouses are up to Dh120,000 from Dh95,000 in the same period.
“Out of 2,500 properties on our books, I would say we have four available right now,” he said.
The increase in rental costs is even higher in other parts of the emirate, added Mr Wilmot.
“There are properties in Dubai Hills that were renting for Dh100,000 to Dh125,000 this time last year,” he said.
“Now you are looking at Dh190,000 to Dh200,000 for those very same properties.”
Another area seeing rises is Damac Hills, also close to Al Qudra Road.
“The demand we are experiencing in Damac Hills is exponential. A villa that I rented to a tenant last year for Dh185,000 has rented this year for Dh275,000," said Conor Thompson, from Allsopp and Allsopp.
"A high number of my clients are families that have relocated to Dubai from the UK and Europe.
"With the market showing no signs of regression, I am confident that this demand will continue throughout Q4 of 2021, and is not showing any signs of slowing down anytime soon."
