Paying annual rent with one cheque is on the rise again in Dubai, according to a report.
And more tenants are deciding to stay in their current property, where there are rent controls in place, to avoid rising costs.
That was according to the Q3 2022 Market Report, from real estate company Betterhomes, based on figures released by the Dubai Land Department.
It found one-cheque payments rose by 8 per cent compared with last year.
Betterhomes
“With low supply and high demand, the power of negotiation currently lies in the landlord's hands and [they] can, therefore, push for single cheques,” said Richard Waind, group managing director at Betterhomes.
“In addition, higher rental prices across the market mean those who can afford it may opt for single cheques to negotiate a lower rental prices.”
Paying with one cheque is the most popular way to secure rent for the year, making up 32 per cent of transactions.
The next most common was four cheques, which represented 30 per cent of rentals, followed by two cheques (22 per cent), three cheques (9 per cent), five cheques (5 per cent) and 12 cheques (1 per cent).
Another property expert said tenants had to accept it was a landlord's market at the moment.
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Areas with the lowest rent rises this year — in pictures
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“Landlords are pretty much insisting on one cheque because the market is so competitive at the minute,” said Mario Volpi, sales and leasing manager at Engel & Volkers and a columnist for The National.
“That is becoming the norm. Properties where the landlord will accept multiple cheques can still be found but it is most likely they are existing contracts being renewed.
“Most landlords are looking for one cheque, or two at most, for new contracts or properties that are empty.”
Prices still on the rise
The report from Betterhomes said Dubai’s recent population growth continued to put pressure on today’s rental inventory and “we are seeing rapid price increases in the most popular areas, with occupancy across Dubai at a five-year high”.
While this represented good news for investors, it means tenants are having to look further afield for better value.
“Overall transiency in the rental market has dropped significantly as tenants look to stay put and renew, rather than face today’s prices,” read the report.
The area that had the biggest average increase in apartment rentals was Downtown Dubai, with the average cost of rent working out at about Dh155,000, representing a rise of 19 per cent from the previous year.
Dubai Hills had the highest rise when it came to renting townhouses or villas, with a rise of 31 per cent, with the average rent being valued at more than Dh247,500.
Huge rise in sales across Dubai
The report also showed there had been a significant rise in the number of property sales compared with this time last year.
Sales totalled about Dh52.4 billion in the first three quarters of the year, representing a rise of 61 per cent from the same period in 2021.
There were slightly under 22,390 transactions in Dubai during the third quarter.
Cheaper areas
The most sought after location for those looking for cheaper apartments to rent was Jumeirah Village Circle (JVC), according to a third-quarter report released by property portals Bayut and Dubizzle.
The average cost of renting a studio apartment there remains unchanged at Dh36,000.
One and two-bedroom flats average Dh51,000 and Dh72,000 in JVC, with asking rents increasing by up to 6 per cent.
Those seeking affordable villa rentals were most likely to look to Damac Hills 2, where prices have risen by up to 3 per cent for five-bedroom houses, which will set you back an average of Dh115,000.
Luxury rentals
Dubai Marina is the most popular location for those seeking luxury apartments to rent, according to the report from Bayut and Dubizzle.
A one-bedroom flat there will set you back an average of Dh91,000 while two bedrooms will cost you Dh139,000 and a three-bedroom apartment will average Dh209,000.
The same report stated that Al Barsha was the top location for luxury rentals in Dubai.
A six-bedroom villa there will cost you an average of about Dh460,000.
Where to buy-to-let
Dubai Marina is also the most popular area to buy a luxury apartment in the city, according to Dubizzle and Bayut.
The average sales price per square foot for flats in the district has increased by more than 2 per cent to Dh1,532.
JVC is also the most popular location for buy-to-let apartments, with a rise of about 2 per cent per square foot to Dh891 in the third quarter.
Villa sales
Those buying luxury villas are most likely to turn their attention to Dubai Hills, where the cost of a luxury apartment has risen by 3.36 per cent to Dh1,660 per square foot.
Damac Hills 2 is also the most popular destination for those looking to buy a cheaper apartment, with the sale price per square foot working out at Dh636, a rise of slightly under 4 per cent.
