Dubai: More residents eye home ownership as lease renewals drop by 30%
New data reveals that Dubai is experiencing increased property ownership because more tenants choose home buying due to rental price increases.
Developers that already have a strong foothold in the market responded to tenant ownership interest by creating aggressive payment plans with up to 80/20 financing options.
Data from Dubai Land Department indicates that Dubai experienced a 30 percent decrease in February's rental renewals month-on-month according to Allsopp & Allsopp pointing to possible changes in the property market.
“It’s more than just short-term interest now. The falling rate of rental renewals together with increasing villa sales demonstrates how individuals are choosing long-term property commitments. Lewis Allsopp, chairman of Allsopp & Allsopp, stated that people have started to transition from renting to establishing permanent residences here.
Over the past four years new residents have driven rents to more than double in several Dubai communities. The imbalance between high demand for housing and limited supply has driven rental prices up continuously in the emirate which leads tenants who have established their lives in Dubai to opt for property ownership.
Dubai's real estate sector provides both investment opportunities and permanent residences for people. People show their trust in Dubai’s future and its global pull through their growing interest in long-term property ownership according to Allsopp.
Affordable rental communities in demand
According to Randy Fink, CEO of property, community management and valuation and advisory at Asteco, the UAE rental market experienced continuous growth throughout 2024 because of strong demand paired with positive market sentiment.
The search for affordable housing options pushed rental growth and activity higher in lower and mid-end market segments due to rising rental rates throughout all sectors and areas. Affordable communities in Dubai and Abu Dhabi and the Northern Emirates saw benefits from this trend through competitive rent offerings alongside growing quality development supply and improved infrastructure which led to better accessibility for tenants. Fink noted that hybrid working arrangements have increased support for this migration trend.
The Allsopp & Allsopp February Market Snapshot report disclosed a 105 percent year-on-year increase in sales value for villas and townhouses because more people are committing to permanent residence. The trend shows residents moving away from short-term investments by choosing to establish permanent homes in the city.
Developers woo new buyers
Developers are developing innovative payment plans to attract new buyers who show increasing interest in property ownership as tenants and foreigners move to Dubai.
Asteco reports that leading developers unveiled aggressive payment structures extending to 80/20 and 75/25 models. By the end of 2024 developers started offering sales incentives including lower down payments and extended payment plans alongside discounts on service charges.
Damac Properties disclosed on Tuesday that UAE residents can receive bank financing for off-plan projects when construction hits 35 percent completion.
Home financing for off-plan projects becomes available when construction reaches 50 percent completion. According to Amira Sajwani who manages sales and development at Damac Properties this new policy will transform property ownership opportunities for UAE residents and investors.
This decision proves our enduring dedication to providing homeownership opportunities to numerous residents. Sajwani expressed excitement about being the first developer in the UAE to launch this solution that enhances financial flexibility for real estate investments and expands access to luxury living.
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