More than one in five UAE residents paid more rent for the same property in 2018 than they did last year, despite sliding rental rates, according to a report from the price comparison site yallacompare released on Monday.
The company found 21 per cent of tenants paid a higher rate in the second quarter of this year than they did in the same period in 2017. Just under 20 per cent paid less to rent out the same property than 12 months ago, while just under half paid the same.
“There’s clearly a discrepancy between the perceived wisdom that rents in the UAE are dropping and what people are actually seeing on the ground,” said Jonathan Rawling, the chief financial officer of yallacompare. The findings came from the company’s Consumer Confidence Index for the second quarter of the year, first released in July. About 1,350 people were polled on the state of their finances.
Property consultancies have reported falling rates in recent months. A July report from property consultancy Chestertons found that apartment and villa rents fell 3 per cent and 1 per cent in Abu Dhabi, respectively, in the second quarter of the year.
In Dubai, a July study from property portal Bayut found rental rates had fallen between 2 per cent and 9 per cent over the past 12 months.
Despite these studies, the yallacompare research found that not all tenants had benefited from the falling rental rates. While some respondents are paying higher amounts following a shift to larger or more expensive homes, the vast majority (66.5 per cent) are still in the same property they were in last year, yallacompare said. Of those still in the same home, 30.8 per cent are paying more in rent than they were last year – which equates to 21 per cent of all respondents.
Mario Volpi, the sales and leasing manager at Engel & Volkers, said he was “surprised” a fifth of existing residents chose to stay in the same property without negotiating better terms.
“I agree that moving can be a hassle and of course there are related costs too, such as fees, commissions, renewed deposits and the cost of the actual move itself but even with all these taken into consideration there are still very good deals in the market that will make the move worthwhile,” he said.
Mr Rawling said the discrepancy between falling rents and what tenants actually pay was due to the sampling methods employed in real estate studies, which traditionally focus on the data found in new property listings.
“This is useful but the fact that the property in question is listed means that there has been a change in tenant,” he says. “Consumers may get a better deal if they move but are generally not paying less rent for the same property.” Source: The National