Video .. Real estate: fix the rental value in Dubai 3 years .. Stability of the market and control of expenses

Opinions of real estate experts have varied about the positive effects of the three-year rental boom in Dubai. Some said the proposal was a major step towards achieving consistency in the UAE property market as a whole, contributing to the stability of the rental market and real estate in general.


Real estate experts' views on the positive effects of the three-year fixed-rent proposal in Dubai have varied. Some say the proposal is a major step towards achieving consistency in the UAE property market as a whole, contributing to the stability of the rental market and real estate in general, and helping tenants stabilize and control expenses. While others felt that the annual renewal, in accordance with the supply and demand equation and the rental index, currently gives preference to the lessee.

A third view was that the annual renewal should be combined according to the supply and demand equation and the three-year lease value, leaving the option for the lessee to choose between the two models.

For their part, tenants have seen that fixing rent in Dubai for three years contributes to family stability and helps control their finances.

In addition, owners and property managers supported the proposal to fix the rental value in Dubai for three years, pointing out that this would stimulate and encourage investments in the emirate and increase the occupancy rate of Dubai real estate.

Real estate expert Omran Al-Sharhan said that the stabilization of rental value for a period of three years will contribute to the stability of the rental market and real estate in general, considering that the rental sector represents 80% of the real estate market and represents annual financial flows for many real estate companies, Large rent in Dubai real estate market.

He added that this proposal, if implemented, helps stabilize tenants in Dubai, because it offers a good alternative to them, away from the annual mobility in search of less expensive properties, in addition to the annual increases in rental values ​​as is the case now, stressing that this confuses tenant accounts Whether they are individuals, families or commercial companies.

Al-Sharhan said that it is better to fix the rental value every three years. The contract is renewed after the increase is approved and the agreement of the parties (the lessor and the lessee).

He explained that the system is in place in many countries of the world, and a number of emirates of the state, and the aim behind it to achieve stability for families, and companies that wish to develop future plans in the medium term, stressing that stability is one of the most important values ​​of stabilization of rental value.

Main items of expenditure

Real estate expert Waleed Al Zarouni said rental values ​​are one of the most important items of expenditure in the housing sector for individuals, families and the commercial sector, accounting for an average of 30-40% of annual expenses for families. .

He added that the stabilization of this value will stabilize the rental sector, and will return to Dubai a large part of its tenants who prefer the system of fixing the value of rent for three years, as is the case in other emirates.

Al Zarouni stressed the revival of the residential rental sector in the event of the implementation of the proposal, in addition to expectations of a large occupancy in terms of commercial real estate.

A big step

"The new proposal will offer a number of benefits to tenants and landlords in Dubai, as tenants will be able to manage their expenses more accurately and know that they can afford to rent their unit in the near future," said Matthew Gregory, Head of Real Estate Sales at Dubai Properties. While owners will have a clear idea of ​​their rental income.

"If implemented, the rental value system in Dubai will be a major step towards achieving consistency in the UAE property market as a whole, given the existing laws in Sharjah. This approach will support a clear long-term vision to support the economic balance." .

He stressed that the increase in rents, or increase in the prices of any component of monthly spending in the family budget, affect the financial plans of the family.

Positive effects

In the same context, the chief executive of Biot.com, Haidar Ali Khan, said that the two approaches - "fixing rental values ​​for three years" or annual reference to the rental index - would have positive effects on landlords and tenants.

He believed that the stabilization of rents for three years will generate a general sense of financial stability over this period, and will contribute to determining the value of rents within longer geographical and temporal ranges.

On the other hand, annual contract renewals will provide a better opportunity to take advantage of prevailing market conditions and reach mutually beneficial deals faster.

Although long-term stability may be attractive to some tenants, we believe that the most sustainable option over the long term is to invest and buy property, especially for those who plan to stay in the country for long periods, Khan said.

freedom of choice

The general manager of the Royal Lewan Real Estate Company, Mohammed Hareb Al Falahi, considered the necessity of combining the real estate market between the annual renewal of the rental contract according to the offer and demand and fixing the rental value for three years, provided that it is optional for the lessee. One long-term (three years), one annual renewal that is renewed annually, and the tenant has the freedom to choose. The long-term increase is to be fixed at a good rate, proposing a 10% rate acceptable to both parties.

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Slip: "installation" currently is not in the tenant's interest

"The proposal is good for the tenant, but it is tied to the timing," said Dana Salbak, senior director of research at GLL Real Estate Advisors. "Installment of the rent is not in the best interest of the tenant, Under pressure decreased in rental terms, and the best timing of the proposal is when the rental rates to protect tenants.

Hammadi: resorting to the index of rents every year the best solution

The founder and CEO of Al-Ruwad Real Estate Co., Ismail Al-Hammadi, said that taking the rental index every year remains the best solution until the two sides of the rental contract are settled: the owner and the tenant.

He said that fixing the rental value for three years may be unfair to the parties. Here, either the landlord loses a significant percentage of the return on his property if the rental value is low, or the tenant loses a percentage of his money if the rent increases on a housing unit Value, while he can move to a better unit at the same price, with the indicator of the same building in the case of apartments.

"In my opinion, the market does not need this, because the real estate market is not subject to permanent stability, a market supply and demand, as well as governed by many of the social and economic variables global and local.

ref: emara