Dubai landlords are increasingly asking for full annual rental payments upfront, particularly in freehold areas where demand for rental properties exceeds availability. This trend has resulted in a decrease in property owners willing to offer multiple cheque payments, even up to 12 cheques in some cases.
Freehold areas in Dubai are locations where individuals or companies can own property, generally in contrast to leasehold areas where the ownership is limited to a certain period of time.
According to Richard Waind, Group Managing Director at property services firm Betterhomes, there was a 6% increase in tenants paying with 1 cheque in 2022 and a 4% decrease in 4 cheque payments. This shift towards single cheque payments is mainly due to landlords exploiting the high demand for rental properties.
Other property companies have also reported that landlords are increasingly demanding single cheque payments along with lease agreements. This can be especially challenging for tenants who are new to Dubai and may not have the means to pay the entire year’s rent upfront.
Throughout 2022, landlords held a strong position in the rental market, with rent increases at popular locations ranging from 20% or more. Even in locations where new homes were handed over in large numbers, most of these properties were pre-let (renting a property before the completion date) at higher-than-average rentals.
Richard also stated that there was a 36% rise in rent last year. He further added that the lack of supply, particularly for villas, is severe in Dubai, leading to the fastest hike in villa rents.
