They confirmed its decline in 2020 by up to 20% due to the repercussions of Corona on the markets
Real estate agents expect rental rates to stabilize in the country during the next year
The rental market in Dubai and the country witnessed unprecedented offers on renting real estate units.
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Realtors reported that 2020 was a year of challenges and declines in the rental sector at the state level, affecting all commercial, office and residential categories, due to the repercussions of the Corona virus on the markets, so that rents fell by up to 20%, expecting that next year will witness stability in rental rates in the markets. In conjunction with the rates of economic recovery and circulation of the Corona vaccine.
They indicated to "Emirates Today" that this year witnessed positive cooperation between landlords and tenants to help those affected by the repercussions of "Corona".
Year 2020
In detail, the founder and CEO of Al Rowad Real Estate Company, Ismail Al Hammadi, said, “The year 2020 was special for the real estate sector in Dubai and the country, whether at the level of purchase or rent, as rents witnessed a tangible decline, including all types of residential units.
There has also been a wide movement of transfers between tenants and extraordinary facilities in the rental market by property owners, as the rental market in Dubai and the country in general has never seen offers on renting real estate units.
He added, “But this year, there have been many offers that varied between granting one or two months free rent.
And between the reduction of the rental price for the renovation, as well as some offers that we were not familiar with in the market, which were initiated by the real estate management companies involved to provide free furniture transfers.
In addition to the landlords exempting tenants from rent payments, in order to relieve pressure on those affected by the (Covid-19) pandemic, which has lost many tenants their jobs or deductions from their salaries, and it is possible that the year 2020 in the rental sector can be defined as the year of transfers and rental offers.
Al-Hammadi added, “The repercussions of (Covid-19) had a greater impact on the market for office and rental space compared to residential spaces, due to changing working conditions in offices and the adoption of a remote work system, which was favored by many dealers, which led to a change in the criteria for choosing an office unit space. , In addition to the almost complete transformation of e-commerce, and this is what affected the rental rates of commercial spaces.
He explained that «market studies indicate that the rate of decline in the prices of rents for apartments, residential villas and office space in Dubai in general, ranged between 10 and 13% during the current year compared to 2019».
Symbiosis
For his part, Chairman of the Board of Directors of W Capital Real Estate Broker Walid Al-Zarouni said, "The year 2020 witnessed great cooperation between owners and tenants, while reflecting the spirit of social solidarity, and in a way that suits the repercussions of the pandemic crisis (Covid-19)," adding that some landlords They provided exemptions and facilities in paying tenants for periods of up to three and four months.
Al-Zarouni continued, that the effects of the Corona virus in the rental sector were clear, especially on office and commercial spaces, expecting that 2021 will witness a continuation of the stability of the rental market so that no decline or rise is recorded, and this is a healthy and encouraging investment in the real estate market.
General challenges
For his part, the CEO of Harbor Real Estate, Muhannad Al-Wadi, said: “The year 2020 is considered a challenging year for the rental sector, and despite this there was solidarity by landlords to support tenants, especially in light of this year coinciding with the Corona pandemic and its impact on The rental sector ».
Al-Wadi pointed out that this period witnessed three types of landlords, the first type was an owner who provided support on his own to his tenants, and the second type was the one who pressured the tenants to reduce the rent or postpone payments, and the third type did not provide any support or any assistance, and these lost Many of their tenants.
He pointed out that the rents index was not reflective of the real situation of the market, due to the significant decrease in rents due to the repercussions of "Corona", indicating that the residential sector was the most affected by other rental groups such as the office, commercial and industrial, as the rates of decline ranged between 12 and 20 % In the residential sector.
He expected the rental sector to recover next year, coinciding with the start of the use of vaccines in many countries of the world, and the beginning of the balance of supply and demand equation, as well as government incentives related to the ease of doing business in Dubai.
Tenants and owners
In turn, the real estate expert, Mohammed Salman, said, "The year 2020 was the year of cooperation between most of the tenants and landlords, although some refrained from helping, but the scene was positive and reflects the spirit of solidarity and cooperation that exists between individuals in the UAE." The rent for residential properties was in the range of 20%.
Salman expected that rental values will improve in 2021, with the government's incentives represented in many decisions supporting investors and residents, individuals and families.
For his part, the Chairman of the Board of Directors of Al-Waleed Investment Company, Muhammad Al-Mutawa, said, "The best title for 2020 is the year of solidarity between landlords and tenants, as this year has witnessed great help from landlords, despite the fact that many of them have been affected." 2021 is better on the level of demand, and that is at the level of residential and commercial properties, in which the demand has begun to balance on the residential level, and is trying to reach the point of balance in (commercial).
In the same context, Abdul Karim Al-Mulla, CEO of Standard Real Estate, said that "the year 2020 witnessed great cooperation from landlords towards tenants," indicating that many of them provided assistance in the form of postponement of checks and a reduction in the rental value, expecting that 2021 will witness A positive movement in the real estate sector, supported by the start of the use of the Corona vaccine, and the increase in tourism, with the continued flow of arrivals to Dubai, as well as government activity to revitalize the internal and external tourism sector and stimulate the investment sector.
Positive cooperation
For his part, the real estate expert, Dr. Raad Ramadan, said: “There is positive cooperation between the landlord and the tenant during 2020, by providing some support to tenants, especially in the office sector, by waiving some payments, and in (residential) by reducing rents.”
He pointed out that the rent index in force in the Dubai Land Department has been ignored in the past period and since the beginning of the Corona crisis, and the market has become largely dependent on supply and demand, due to the exceptional circumstances we are going through.
"The situation has become difficult for many landlords due to the existence of a major correction in the market, which the property manager cannot afford, because he is committed to a fixed income with the owner, and he has become a choice between renting at a low price," said the CEO of Stratom Company for Owners Associations Management. Or for the housing unit to remain empty, especially in conjunction with the increase in supply, and conditions are expected to improve in the future. ”
The rental sector
In a related context, the Chairman of the Board of Directors of "Sahab Real Estate", Abdulaziz bin Hoyden, said that "the year 2020 in the rent sector in the country was negotiating (the master of the situation). The tenant and the owner were in an argument during the past year, in an attempt to reach compromise solutions in What is between them may reach a change of contract, ”indicating that this year has witnessed many initiatives launched by real estate companies, in line with government directions and initiatives aimed at supporting individuals and companies to overcome the repercussions of the temporary circumstance caused by (Covid-19), where these initiatives were sent A message of reassurance to citizens and residents of the UAE, which contributed to the launch of more incentive initiatives.
He expected the rental conditions to improve in the coming year, especially in conjunction with the return of the upward curve of the rental index, especially after the implementation of the easing of movement and movement restrictions and the gradual recovery of economic activities.
For his part, the Chairman of the Board of Directors of the Real Estate Company, Khamis Al-Zeyoudi, said that “many landlords have provided assistance during the current year, and rents have decreased significantly in many areas of the country in line with the repercussions of Corona on the markets.” He expected the movement to rise again. With the efforts made by the state in supporting the business sector, it is expected that the equation of demand and supply in the residential and commercial sector will reach a "balance point" during the next year.
Price correction
Fouad Jassim, director of the Manara Al-Shati Real Estate Company, said that “the year 2020 witnessed remarkable indicators of price correction in rents in various parts of the country, including the Emirate of Sharjah, which comes in line with supply and demand and the effects of the Corona pandemic,” indicating that “ The correction rates in residential rents reach, on average, about 20% since the beginning of this year until now.
He pointed out that “next year is expected to witness positive stability rates in rents, with the resumption and return of many economic activities to their usual indicators, and with the introduction of the (Corona) vaccine”, pointing out that “some new units, especially those with high services and facilities, are expected. To witness a slight increase during the next year with the increase in demand.
In addition, the real estate broker, Majdi Abdulaziz, added that “the indicators of price correction in the rents of residential units in Sharjah during the current year ranged between 15 and 20%,” indicating that “the price decline included the various regions in the emirate, but the largest rates of decline were concentrated in buildings. »Old and some inland areas close to the borders of Ajman».
"The current indicators in the market indicate a positive stability in residential rents during the next year, supported by the growth of demand and the recovery of a number of economic activities in the country," he said, pointing out that the stability ratios will be general, but they will be concentrated in areas such as Al-Taawon, Al-Beheira and Al-Mazzar, as they are the most in demand.
The impact of "Corona" on the rents of residential units
The head of the representative committee for the real estate sector in the Sharjah Chamber of Commerce and Industry, Chairman of the Al-Ghanim Real Estate Company, Saeed Ghanem Al-Suwaidi, stated that “it is natural for the (Corona) pandemic to have effects on the rents of residential units, which have witnessed correction rates between 15 and 20% during the current year.” , Noting that «the speed of economic recovery achieved by the state, from the effects of (the pandemic) in multiple sectors, reflected positively on the support of stability in the rental sector, which is expected to appear more clearly during the next year».
He added that “the recent period has witnessed a large number of families coming from different countries to rent or buy housing units in Sharjah or other Emirates, after the great success that the state achieved during the Corona pandemic in providing safe rates of safety and applying precautionary measures, in addition to the resumption of economic activities. And tourism in accordance with safe standards, which promoted the gradual and growing rates of recovery for various commercial sectors, especially with the fact that the state was a forerunner in resuming flights to various international destinations.
Positive stability
The executive director of Al Somme Real Estate Company, Sufyan Al Salamat, said that “the prices of housing units in different regions have witnessed a price correction of up to 20% since the beginning of this year, affected by the repercussions of the (Corona pandemic)”, pointing out that “according to some market indicators It is expected that rental prices will witness positive stability rates during the next year.
This year witnessed positive cooperation between landlords and tenants to help those affected by Coronavirus.
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