Due to an increase in rents and a lack of villas, new tenants entering the market now are likely to get less for their money than existing tenants who have larger units. This is according to real estate industry executives.
Due to restrictions on migration after the pandemic’s outbreak, demand for larger flats and villas/townhouses had increased notably in the UAE. New entrants will have to accept the new reality of paying more for the less space since demand for larger units has not only been sustaining but also increasing.
“New renters entering the market must be aware that they will likely get less for their money than those who are already there and have a bigger unit, as rental rates are rising every day. Although rent increases are unavoidable, individuals who own larger units are more likely to hang onto them and bear the price increase, therefore smaller units are more easily available “director of operations at Provident Real Estate, Morgan Owen.
According to Ali Rao, Group CEO of Kingsley Properties, new purchasers are relocating to flats more frequently as a result of annual leases that make it more affordable for them to do so.
He claimed that many inhabitants still remain in smaller flats despite realizing that the adjustments they made during COVID-19 may be more long-lasting and economical.
According to Ayman Youssef, vice-president of Coldwell Banker in the UAE, the lack of villas and townhouses is continuing to drive up the cost of real estate in this market.
“The demand for upscale serviced residences and flats with views of the ocean is steadily rising, even though this tendency is less pronounced in apartments. On the other hand, inexpensive real estate has seen a moderate price increase, “added he.
Landlords relocating to vacation homes
Morgan Owen continued to discuss the nuances of the new trends affecting the resident market by revealing that landlords are also embracing the idea of a vacation home, since it offers them better returns and flexibility.
Furthermore, he continued, “landlords are now beginning to understand the importance of property management and having a team or individual to manage the property from start to finish, making it easier for both landlord and tenant.”
According to Ali Rao, there is evident enthusiasm among investors for vacation houses as well. They view it as a fantastic way to increase rental incomes.
According to Shilpa Mahtani, COO and co-founder of bnbme Vacation Homes by Hoteliers, a holiday home owner can make between 10% and 50% more than someone who rents out their property on a long-term basis.
“The largest benefit is that homeowners can earn 25% more year over year if they start renting out their homes, helped by excellent evaluations and our marketing,” she said.