A tale of two Jumeirahs
It’s important to distinguish between seemingly similar communities to understand their varying fortunes. Situated on either side of Al Khail Street with access to the same amenities, Jumeirah Village Circle and Jumeirah Village Triangle are a case in point.
Property Finder’s latest UAE real estate market report – including commentary from haus & haus’ Managing Director, Luke Remington – states that the average price of an apartment for rent in JVT fell 8.9% in the last year. Meanwhile, the value of villas for rent in JVC increased by 5.4% during the first 6 months of 2018 alone.
Why the difference? Well, JVT now has competitors when it comes to affordable, central apartments with great facilities. Whereas there are less options for tenants wanting to rent a villa close to the city centre, so JVC remains in demand. JVC is also close to excellent schools which always makes it popular with families. Knowing these micro-markets is just as essential for buy to let landlords as tenants.
Communities on the turn
Several factors could mean increased demand and appreciating rental rates across Dubai. Less off plans, for example, will complete by the end of 2018 than promised. Then there’s the expected population growth up to and after EXPO 2020. Plus further government initiatives – like the 10 year visa extension – attracting more newcomers.
So, communities such as Dubai Hills currently have a steady supply of new villas and apartments, but this will change when building slows down, sending rents up. Equally, renting a property in Dubai South now is wise if you want to fix a competitive rate for the next year. With more expats moving in to work on the EXPO site, this location will become sought after.
Waiting for that mythical moment when rents reach rock bottom could actually be a barrier to success for both landlords and tenants.
Rent to own (RTO)
RTO is still in its early stages in Dubai, but regulators are making it a safe practice. If you decide an RTO scheme is the way forward, you’re likely to find annual rent for the first 3 years is higher than average wherever you live. This is because rental installments paid during that period will act as your down payment. Interestingly, RTO schemes are available in JVC and Al Furjan, which happen to have recorded rent increases this year. Whether or not there’s a link it’s useful to have background knowledge when trying to make sense of the statistics.