Dubai: The property market in Dubai and its tenants will be looking for some relief from higher rental demands as and when more landlords place their units back for yearly rentals from short-stay lettings.

There have already been instances of landlords making the switch, particular at the Downtown and in Dubai Marina after peak demand for short-stay leases seen in November and December receded.

“Landlords are seeing the 20-40 per cent increase in yearly rentals at Dubai’s most in-demand locations,” said an owner of a property management firm. “These rent gain trends continue into 2023, and some of these landlords do not want to miss out, and they are the ones switching back to annual rentals.

“Because when they do, they will be getting a rental request almost immediately.”

Industry sources say it will require a lot many units becoming available for annual leases for the ongoing rent increases to subside. Latest two-bedroom lease renewals at Downtown Dubai have taken place at Dh120,000 plus, while for brand new contracts, the rents are coming in at much higher levels, according to the portal DXBInteract.com

At Dubai Marina, a two-bedroom (1,119 square feet) rental just got signed for Dh125,000.

Short vs. long

Other landlords are caught in a dilemma as to whether opting to move out from short-stay rentals will actually get them higher returns in the Dubai market right now. Joanna Plunkett is the Short Term Rentals Manager at BetterStay, and she reckons that “Short-term rental isn't always just about the rental amounts. We have landlords getting the same rental income with their short-term property as they would on a long-term lease but want the flexibility of asking a tenant to leave without the time and expense of serving a legal notice.

“As we know, in the long term, a landlord can only take back possession of this property if he is selling, using it for himself or doing major renovations. Even in those cases, they can wait up to a year to get it back.

“We are not seeing landlords pull out from short stays.”

More to follow...