COMMENTS
Flexible rental terms Improved consumer and investor confidence justifies efforts to reinforce regulations and create more flexible rental terms
Iseeb Rehman
DUBAI REAL TIMES
W 20
hile new trends in the property rental market have emerged in the wake of the global economic crunch, analysts point out that long-term outlook has remained remarkably vibrant because of the proactive measures that have been adopted by both government-appointed regulators and market players. Initiatives such as the rental index by the Real Estate Regulatory Agency (RERA) in Dubai has been described as an important positive step even as practical decisions by real estate agents to offer flexible rental options have greatly helped ease tension and improve consumer and investor confidence in the market.
“ … tenants now have a bigger say as far as the rental market is concerned and I believe that this is an important step that will keep speculators at bay…” Iseeb Rehman
“To safeguard a relatively volatile market amid the global economic upheaval, the government and the private sector must move towards the same direction and act proactively to restore market stability. Considering that the recent economic slowdown was highly unexpected and unprecedented, I would say that the government and the key players in the property sector have responded satisfactorily and have made justified efforts to protect the market. As a result, tenants now have a bigger say as far as the rental market is concerned and I believe that this is an important step that will keep speculators at bay and ultimately help maintain rental values within reasonable levels,” said Iseeb Rehman, Managing Director, Sherwoods Independent Property Consultants. “The rental index, in particular, must be used as an instrument that will lead to a regulatory framework of standardisation of rental plans. In addition, while the index is certainly a very encouraging sign of the government’s active involvement in addressing key issues within the property sector, it must be noted that the rental index needs to be revisited once every quarter, most especially in this period of transition,” added Rehman. With the supply and demand situation gradually weighing in on the equation, Rehman believes that the impending arrival of new freehold stocks over the next few months will see a slew of creative options in terms of rental values and payment plans being offered to tenants. The
tenant market will particularly benefit from better payment structure, which could range from four to 12 cheques a year, subsequently facilitating the creation of new niche markets and helping address the housing requirements of a wider segment of society. Rehman revealed that the effects of the improving rental values have been felt through a gradual increase in demand in areas categorised as ‘New Dubai.’ He further noted that with fresh supply being introduced in stages, prices could become even more attractive and help in energising the property sector. Rehman said: “Currently we are seeing a lot more demand in areas such as Barsha, Tecom, Jumeirah Lake Towers, Discovery Gardens and Dubai Marina, which are categorised as the New Dubai areas. We have already seen a significant decrease in rental values, which could well go down further given the supply situation in these areas.”