Dubai Rental Dilemma: Navigating Rising Rates and Negotiation Strategies

Dubai rents

With the continuous annual increase in rental rates, tenants in Dubai are facing financial strain, especially those dealing with stagnant salaries. Landlords are taking advantage of the rising trend of tenants opting for multiple-cheque payments and negotiating higher rents. The demand for 12-cheque payments is growing, even if it means tenants lose some savings. Experts predict that the upward trajectory in rental prices will persist in 2024, impacting tenants significantly. However, there are strategies tenants can employ during negotiations to make the best of the situation.

Negotiating Strategies:

1. Single Cheque Payments: Tenants paying upfront in a single cheque can save significantly on their rentals. However, the market trend is pushing landlords to demand higher rents as the number of cheques increases.

2. Value Add-ons: During negotiations, tenants can push for value add-ons such as robust maintenance contracts or AC servicing. These additional benefits, paid for by the landlord over an extended period, can be easier to negotiate.

3. Challenges for Tenants: Negotiating lower rents is challenging due to an undersupply of listed properties and rising rental values. The market dynamics make it difficult, and in many cases, unrealistic for tenants to secure lower rental rates.

4. Changing Rental Dynamics: One-cheque payments are becoming less common, and tenants are increasingly opting for multiple cheques. Large corporate employers offering to pay rent in one cheque have become rare, contributing to the shift in rental dynamics.

5. Rental Rate Projections: Industry experts anticipate that rental rates will continue to rise at a double-digit rate in 2024. High demand, the city's appeal as a haven for the wealthy, and an influx of professionals are driving the market.

6. Broker Commissions: Brokers are seeking higher commissions due to the robust market. Landlords negotiating higher rent increases with 12-cheque payments are becoming more common, further impacting tenants.

7. Tenant Awareness: Tenants are becoming more aware of their rights, educating themselves about Rera rules and challenging landlords when there are deviations from legally allowed rent increases. Dubai's Real Estate Regulatory Authority (Rera) plays a role in ensuring fairness and transparency.

8. Tenant Demands: While tenants are less likely to move amidst increasing rents, they have become more demanding, seeking property alterations. Long-term tenants are requesting upgrades and alterations, such as wrapping kitchens and bathrooms, as they intend to stay in properties for an extended period.

In conclusion, tenants in Dubai are facing challenges due to the continuous rise in rental rates. Negotiating lower rents is difficult, but tenants can explore options such as single-cheque payments, value add-ons, and making the best of the situation during negotiations. The changing dynamics in rental payments and tenant demands reflect the evolving landscape in Dubai's real estate market.

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By- Sahiba Suri