More Dubai residents are likely to switch to buying homes instead of renting them, a market report has suggested. “Consumer buying behaviours were found to be rapidly evolving towards more long-term investments, with tenants preferring ownership over rental properties, driven by the surge in average market value by 25 per cent,” real estate marketplace Property Finder said as it released its latest Annual Market Watch.
The report found that the number of rental contracts witnessed a slight decrease of 5 per cent last year. “With rental values rising in the last year, and at an all-time premium in certain areas, owning a home has become a more viable option for residents,” said Madhav Dhar, Co-Founder, and COO of Za?ZEN Properties.
“Whether it's to live in or rent out, the opportunity to earn strong rental income or achieve capital appreciation in Dubai is higher than in most other globally recognized cities.” The report notes that the average rent prices for apartments rose by around 25 per cent in 2022 compared to 2021, while villa rents increased by 26 per cent.
Dubai's rental market has changed over the last few years. The prices of properties have increased dramatically due to the increase in the expat population as well as an increase in the construction costs. In addition to this, the interest rate has increased by around 3.4 per cent in 2022 to 4.4 per cent in December. The price of properties is expected to increase more in the future. This has spurred a potential shift in preference of Dubai residents from renting to buying their own homes.
