Saturday, July 21, 2007

Rent rates soar high with 292,000 new entrants to Dubai each year

According to officials, the house rents in Dubai will continue to escalate in the coming years due to the influx of about 292,000 new entrants (residents and employees) each year.

Despite the market showing signs of softening during the recent past, the issuance of more than 800 residence and work visas everyday will continue to push the demand upwards.

Investors, landlords and developers could consider this to be a good news, but it is not so for thousands of tenants who are struggling to make ends meet, making life in Dubai, dearer.

According to JAJ Consulting, Shahid Umerani, told Dubai Quality Group that the prices of a few apartments in UAE have already been settled in 2007 with a downward adjustment of close to ten percent. But, with Dubai, continuing to remain a topmost business destination, and the inflation remaining high, coupled with low interest rates and increase in mortgage business, a strong outlook for positive growth is still expected in the long term.

This, in turn, will have an impact on companies, with employees demanding salary hike. Sensing this scenario, Abu Dhabi announced a new housing scheme for bachelors with a capacity of 110,000 people, indicating a shift in future demographics.

However the panel hopes that the rent rates would come down in the near future, as it is almost getting out of reach for majority of the residents.

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