The recession and credit crunch is effecting Dubai rental property market, tilting it in favour of the tenants.
As Arabian Business reports, Landlords in various location of Dubai are accepting rents in up to 12 cheques, a move in strak contrast of previous practice of accepting rents in 1-3 cheques.
With more properties coming onto the market as job losses mount and tenants downsize amid the global crisis, landlords are increasingly showing more flexibility, keen to secure rental income, it has emerged.
Dubai broker Smith & Ken Real Estate is currently advertising a monthly payment deal for properties on its books in Old Town.
Antony Anderton, sales negotiator at Smith & Ken said: “Landlords are having to be more creative in the current climate.
“Especially with banks not willing to lend, a 12 cheque system is more appealing and it means people don’t have stump up a huge sum of money in advance. This will become more common in Dubai,” he added.
“More landlords are offering this, it’s happening very quickly, people are rapidly moving in this direction,” said Ryan Mahoney, managing director of agent Better Homes.
“Rents are coming down because demand has fallen and supply has risen through [job] layoffs and number of people releasing their units into the market.”
Landmark Properties is also offering 12 cheque deals on Discovery Gardens and the downtown Burj Dubai development.
Rising supply is pushing rents down, which spiralled in the first half of last year before the six-year property boom started to correct.
Lack of bank lending has meant that many residents are unable to get financing to pay for a year’s rent in advance, so landlords are being forced to make payment easier.
Earlier in the month property consultant Asteco said in a report that rental growth slowed in the final quarter of last year. Average annual rent for studios, and apartments with one, two and three bedrooms in Dubai were 80,000, 123,000, 165,000 and 243,000 dirhams respectively, Asteco reported.