Dubai Property

Dubai Property / Dubai Property for Rental

Dubai Property for Rental

Renting property in Dubai can be slightly difficult for the city’s first time residents. The prospect of finding a reasonable place to live, one that fits rental budgets and location requirements is a challenging task, anywhere in the world. In Dubai especially, that task can be daunting. Whether frantically searching through the classifieds or meeting with real estate agents, finding a place to rent in this booming city is overwhelming.

The city’s population has increased from 862,387 in the year 2000 to the latest estimate of over 1.3 million. By the year 2010, the population is expected to nearly double to 2 million, according to The Dubai Ministry of Planning. In contrast to the overflow of people coming to reside in the city, the Dubai property market is presently undersupplied. The number of villas and apartments available for rent cannot meet the market’s demand, sending rents skyrocketing to an average of 37%, according to Dubai Municipality statistics.

The past few years saw a steady rise in rents with some severe increases (up to 40%) in the years 2004/2005. It was in November 2005 that Sheikh Mohammed passed a decree to limit rental increase to 15% per year, but landlords somehow found ways round the cap and rental rates continued to climb higher. In order to combat the continuing inflatory pressures in Dubai real estate, the rental cap was lowered down to 7% in 2007, and 5% in the beginning of 2008. This price control mechanism has proved to be effective to some extent but caused the gap between demand and supply to become wider.

A number of property developments are afoot in Dubai but the demand for property rentals is climbing at a faster pace. By the time new housing schemes are ready for occupancy by new homeowners or tenants, the demand will have doubled. While high rents remain an issue with Dubai property, it is only making the case for ownership of property a stronger and more viable option. For Dubai’s current property owners, the rental money their property commands continues to remain rosy and comfortable for the future.