Why more tenants will move out from rented properties in the coming months

Dubai tenants

Dubai's real estate landscape is witnessing a shift as more tenants contemplate moving out of their rented properties in the coming months. This anticipated trend is influenced by various factors, including changes in rental rates, the introduction of an updated Rera rental calculator, and an influx of new residential units entering the market.

Despite a recent 12 percent year-on-year increase in rent renewals during the first quarter of 2024, rental rate growth has been somewhat stagnant over the last three months. While average apartment and villa rental rates have remained relatively steady, with marginal fluctuations across different communities, annual growth rates have decelerated to single digits.

Experts attribute this phenomenon to several factors. The easing of upward rental movements, coupled with the updated Rera rental calculator allowing for potential increases in existing rates, may prompt tenants to explore alternative housing options. Additionally, the surge in new residential projects, with approximately 43,500 homes expected to be delivered annually over the next six years, presents tenants with a wider array of choices at potentially lower rental prices.

The evolving real estate landscape has spurred tenants to reconsider their housing situations. Usama Sukhera, leasing team leader at Huspy, highlights that tenants are actively negotiating lease terms with landlords ahead of contract expirations. Some are even opting for longer-term leases to lock in prices amidst market uncertainties.

However, the decision to move is not always straightforward. Jacob Bramley, senior leasing manager at Betterhomes, emphasizes the high cost associated with relocation, prompting many tenants to weigh their options carefully. Despite rental increases, tenants often opt to stay in their current properties to avoid substantial moving expenses.

To mitigate the impact of rising rents, tenants are exploring alternative strategies. Flexible payment terms, technological payment platforms, and downsizing within the same community are among the tactics employed by tenants to cope with escalating rental prices.

Ultimately, the current trend reflects a balance between affordability and long-term financial goals for tenants in Dubai. By adapting to market dynamics and exploring innovative solutions, tenants strive to secure favorable housing arrangements amidst evolving real estate conditions.

As the real estate landscape continues to evolve, tenants navigate the challenges posed by rising rental prices, seeking sustainable housing solutions that align with their needs and financial circumstances.