Dubai residents blame 'Expo 2020' for extortionate hike in rent rates
Rents in Dubai and Sharjah have increased by as much as 100 per cent
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With rents in Dubai and Sharjah are on the upward swing, most tenants in the emirates say landlords are using Expo 2020 as an excuse for drastic rent increments.
Over the last six months, rents in both emirates have increased by as much as 100 per cent in some areas and many residents have been forced to seek alternative accommodation.
Though there has been a reasonable increase in demand due to a variety of reasons, including steady influx of new expats, tenants claim the hike in rents are way beyond comprehension.
“I have been living in the same building in Sharjah for 10 years and I used to pay Dh25,000 for a rundown two-bedroom apartment. Last month my landlord sent me a notice for an increase of more than 80 per cent. I was asked to pay Dh40,000 or vacate the apartment within a month,” said Rajagopal Acharya, an Indian sales executive.
He claimed that the owner cited a sudden boom in the market following Dubai winning the Expo 2020 hosting bid.
Acharya is one of hundreds of tenants who have faced a similar situation, either giving in to the owners’ demands or vacating.
“My contract is up for renewal next month and I have already received a notice for an increase of 50 per cent. I’m paying an annual rent of Dh55,000 now and the new rent is going to be Dh85,000. What option do I have? I tried looking around for a new two-bedroom apartment of a similar type. There is not much below Dh80,000 in Dubai. A similar apartment in Sharjah is also going for around Dh50,000 but then going to Sharjah is out of the question,” said Mohammad Musharraf, who is an engineer and lives in Oud Metha area of Dubai.
When questioned, real estate executives renting out apartments in Dubai as well as Sharjah, admitted that the recent increase in rent is not entirely market- driven.
“There is this hype of a market boom, which started following Dubai’s winning of Expo 2020, and owners are trying to cash in on it. I think there is some increase in demand but there is no doubt that much of the boom is imaginary,” said an executive working with Potential Real Estate, who did not wish to be named.
Another real estate agent added that owners are not just content with cashing in on the “imaginary boom” but many are trying to create artificial demand by refusing to rent out their apartments temporarily.
A senior official at Danube Properties, which manages dozens of privately owned freehold apartments, agreed.
“When there is news of the market looking up, owners tend to wait for the prices to increase further before renting out the apartments. That is what is happening right now. A lot of buying and selling activities are going on and everybody is trying to benefit the most from Expo 2020 as nobody knows how long it’s going to last,” said Khalid Ayoub, in charge of properties management at Danube Group.
Though there are a clear set of rules for rent increment in both Sharjah and Dubai, those seem to have gone for a toss for now.