According to new research, Dubai tenants are in a good position to be demanding rent free periods. As the first half of 2019 remained challenging for the real estate market in Dubai, many property owners were offered flexible payment terms. This means that tenants could also begin to ask for similar flexible payment terms, such as rent free periods.
Rent Free Periods for Dubai Tenants
The UAE Property Market Report for Q2 by Cavendish Maxwell highlighted that both property prices and rental prices declined during the tree month period leading up until the end of June. It showed that the average sale price of properties and the average rental price softened across most of Dubai’s major communities in Q2. It also showed that over a 12 month period this rate of decline did slow, but only slightly.
This isn’t something that is only being seen in Dubai, but also other parts of the UAE. The report also showed that the average sale price for apartments in major investment zones declined by 12.6% in Abu Dhabi. This was when compared to Q2 2018. The average sale price of villa and townhouses also fell by a similar amount during the same period, at a decline of 12.1%. Along with average sale prices falling in Abu Dhabi, the price of rent also fell.
Aditi Hariharan is a Senior Consultant at Strategic Consulting and Research at Cavendish Maxwell. He explained that the first half of the year remained challenging for the UAE property sector, as rents and prices continued to decline. However, this does mean that conditions remain conducive for tenants who are well-positioned to demand rent-free periods, fee waivers and flexible payment terms from property owners. They may even consider potentially upscaling to bigger units which may have previously been beyond their reach.