Over one in five UAE residents were paying more in rent, for the same property, in Q2 than they were 12 months previously, according to a survey from yallacompare, the Middle East’s leading comparison site.
The findings come from the company’s Consumer Confidence Index Q2 2018, which polled 1,347 UAE residents on the state of their finances, and run contrary to the perceived wisdom that rental rates across the Emirates are dramatically falling.
For example, two recent studies from Chestertons MENA suggest that apartment rental rates in Dubai declined by 4% quarter-on-quarter in Q2 2018, and 3% in Abu Dhabi. A July study from property portal Bayut said that Dubai rental rates had fallen by 2% to 9% over the past 12 months, and an April report from Cavendish Maxwell said that Dubai rents had declined by 5% year-on-year.
However, according to yallacompare’s research, just 20.4% of UAE residents are currently paying less in housing rent than they were 12 months ago. Over 40% are paying the same in rent as they were last year, and 38.6% are actually paying more.
Some respondents (9.9%) reported paying more in rent after moving to a larger, more expensive property. But the vast majority (66.5%) of UAE residents are still in the same homes as they were 12 months ago. Of those still in the same home, 30.8% are paying more in rent than they were last year – that’s 21% of all respondents.
“There’s clearly a discrepancy between the perceived wisdom that rents in the UAE are dropping and what people are actually seeing on the ground. The confusion arises from the sampling methods employed in surveys,” said Jonathan Rawling, CFO of yallacompare.
“Traditionally, real estate reports focus on the data found in new property listings. With this data, we can track price trends of newly listed properties. This is useful but the fact that the property in question is listed means that there has been a change in tenant. Indeed, this data says nothing about those who are staying put under their existing tenancy contracts. Our data also considers whether tenants remaining in the same location pay more or less this year compared to last. Simply put, consumers may get a better deal if they move but are generally not paying less rent for the same property.”
For the majority of UAE residents who have stayed put in their current homes, news of lower rental prices has done little to reduce their own outgoings. Just 19.8% are paying less to rent out the same property now than they were last year, while 49.4% are paying the same.
“This may be down to a perception that arguing over the rental rate simply isn’t worth the hassle. After all, of the respondents who are paying less for the same property, the majority (52%) are only paying 5% less than they were last year. Still, for an AED 100,000 property, that amounts to an AED 5,000 saving over the course of the year, which is a meaningful sum. We’d recommend trying to negotiate lower rental rates wherever possible. In this regard it is critical to act more than 90 days before your tenancy is due to expire – otherwise it will renew automatically on the same terms,” said Rawling.