The rental market today
In 2010, for the first time in recent years, supply of rental units outstripped demand. This occurred because the slowing of the economy meant that significant numbers of people returned to their home countries. At the same time, many building projects were completed, flooding the market with new units. The result of this was that the rental market became a tenants’ market and prices fell considerably.
Current rental prices for 3-bedroom properties in different areas of Dubai vary greatly and are continuing to change on a monthly basis. They are typically between AED 120,000 and AED 200,000 per year. Prices for villas vary between AED 140,000 and AED 250,000. Also as a result of this shift, tenants were no longer required to pay the whole yearly amount of the rent in advance. In 2009, the Real Estate Regularity Authority specified that four equal payments could be made to cover the yearly rent. In actual fact, many landlords are accepting monthly payments, reflecting the changes in the market.
Renting a property
When you rent a property, it is advisable to go through a registered agent. They will help you with most of the paperwork. You will be asked to provide the following:
- a copy of your passport with a valid residence visa (or a letter from your employer confirming that your residence visa is being processed)
- a security deposit to the landlord of between 5% and 10% of the yearly rent
- a check, or back-dated checks covering the full yearly amount in the name of the landlord
- the agency fee (typically set at 5%)
An official contract must be drawn up between you and the landlord. The contract must be registered with the RERA. Before you sign a contract, you should see a copy of the ownership document and the owner’s passport so that you know that the person is the actual owner of the property.
Most contracts are for 12-months with an option to renew. Some contracts contain a clause that you can move out if you give 2-months notice. However, if you have paid several months in advance, it may prove very difficult to get your money back. Most people find that the best solution is to find someone who will take over their lease.
The contract will clearly state whether you are allowed to make any changes to the property, including painting and decorating. It will also state whether pets are allowed.
The landlord will be responsible for paying for:
- Maintenance of the property. This should be stipulated in the contract.
- Cleaning and maintenance of the pool and common areas.
- Any payments for facilities/membership fees for non-freehold properties.
You will be responsible for paying:
- Municipality taxes. These are normally set at 5% of the annual rent and are paid as part of your utility bill.
- Any payments for facilities/membership fees for freehold properties.
Reputable real estate companies include:
Tel: 600 52 2212
Dubai Luxury Homes
Tel: 04 318 3000
House Hunters Real Estate Brokers
Tel: 04 340 1940
Tel: 04 343 8002