Peruvian Editorial: The Dubai Rental Market
Because I really enjoyed reading this email and to give everyone a better idea of what we are facing in Dubai with the rent market!
So a wise Peruvian once wrote:
Hey yo!
Although it is something nice to put in the headlines for newspaper sales, making new laws does not mean that the landloards are going to follow it. As a believer on the market forces of supply and demand I think that the demand for middle class housing has been increasing way beyond the supply (since all realtor are only focusing on freeholds and luxurious/biggest/largest/deepest/tallest/funkiest projects) - the effect you can perceive it on the prices - and with a law you will not regulate that.
I believe that if realtors don't start giving to the demand (AKA we the analysts cum middle class) what we need, the emirate is going to get screwed. You are going to see that: a) noone is going to live in AED200k / 2 bedroom apartments in the Marina just because Dubai does not have enough people with such high income to live in these luxurious developments (The DAMAC building on which my peruvian friend lives is almost empty), b) expect to have 6 people or more living on a 3 bedroom in the Palms/Marina/luxurios developments (Just like in Bur Dubai or Deira) or c) that the rents will start to decrease (cus they don't have anyone to live there or cus they don't want more than a fix number of people living on them).
You may be thinking that well, companies will have to spend more money on salaries, housing and all that, but they will do it up to the point on which thet will not jeopardize their numbers (or they will just increase the price of their products to offset the increase on the HR expenses with the hit on our pockets) . In some point in time they will say no more, they will not spend more money on employees, people who will not longer enjoy the quality of life they enjoyed will leave and the place will start to receive people who does not care to live in bad conditions
All these will lead to further inflation, moody people, less expats and worst of all the end of the dreamland. Sooner or later the Dubai bubble will be over and we will all be in Shangai enjoying good food, or in Mexico with Margaritas and Pinas coladas.
Keep positive my friends about this stupid housing market. The amount of new houses available in the upcoming months is going to be huge. Maybe rents will decrease, hope is the last thing you loose.
"And that is all I have to say about the war in Vietnam"
Cheers and have a great day
Guillermo "Alan Smith" Grande




