Leading real estate brokerage, Allsopp & Allsopp say that the rental market is recovering from the Covid-19 pandemic and in some cases, performing better than pre-Covid.
Lewis Allsopp CEO of Allsopp & Allsopp says “Pre-Covid-19, we were seeing more of a trend to increase cheque payments and the lockdown accelerated that. Some owners are now asking for fewer cheques again but overall more owners are appreciating that they need to offer increased cheque payments - gone are the days that companies pay for rent in one cheque. In 2021 so far we have seen one cheque rental payments decrease by 28.3% compared to the beginning of 2020.”
The brokerage reports an emerging tenant trend of short-term, month by month rental enquiries as a result of job losses or financial strains.
Allsopp says “Post-Covid-19 lockdown we had many enquiries from residents looking to rent on a short-term basis, so much so that it prompted us as a business to open up a short-term lettings department. The pandemic has changed the lives of many people and tenants and landlords alike are now less inclined to commit to yearly contracts. We have noticed that tenants are looking into their options, making sure they are safe in their jobs before committing to a tenancy contract where they are locked in for a year. Landlords are becoming more inclined to let their property short-term for some of the same reasons. They are looking for flexibility with their property and in some cases steering away from a locked in a contract where a year's notice needs to be given before they can sell the property.”
Allsopp & Allsopp data shows a slight rental price increase, especially in higher-end properties.
Allsopp explains “We rented a five-bedroom Garden Home on Palm Jumeirah in quarter 2 last year for AED 290,000 and this month a five-bedroom Garden Home was rented for AED 550,000 - a 90% increase. The demand for high-end luxury homes has increased and now we're seeing Palm Jumeirah villas renting before listings get a chance to go live on property portals or within seven days if they do go live.
Allsopp continues “As a result of the Covid-19 lockdown, the rental market suffered - viewings were non-existent and tenants found themselves in favour of renewing rental contracts as opposed to moving in such uncertain times. This led to a drop in demand and therefore a drop in average rental prices across Dubai. However, in certain communities, we started to see slight increases in the average rental property price.
For example, a two-bedroom apartment in Silverene Tower A in Dubai Marina was renting for AED 100,000 in May of 2020 compared to AED 125,000 in January 2021.”
The brokerage reported an increase in landlords receiving the asking price for their properties.
Allsopp explains “In February 2020, 22% of landlords achieved the asking price for their property compared to 37% in February 2021. This is encouraging considering that there has been such an increase from before lockdown even began. For those tenants who are not yet ready to enter the market as a buyer are still looking for a property to call home. Some residents are at the start of their Dubai journey but are willing to pay asking price for a property that ticks their boxes and that they can see themselves living in for at least a year.
After lockdown, we saw a real increase in demand for villas and townhouses providing some outdoor space which was no surprise after people emerged from their apartments where they felt as though they had little space and had a new-found appreciation for the outdoors and fresh air!
However, now I would say that demand has evened out slightly and we are seeing demand even out and get back to where it was pre-Covid-19. In saying that, I do believe that apartment lovers now consider villas in their search more than they would have before.”