Dubai rents cheaper than you think
By Khaleej Times
Filed on September 7, 2015 | Last updated on September 7, 2015 at 07.09 am
Apartments much bigger and offer more amenities than global peers
Accommodation costs, more often that not, cause the biggest dent in family budgets in global cities. Despite residents in Dubai crying foul over steep rents and arbitrary hikes, the emirate still does not figure in the 20 most expensive cities in the world to rent, according to Global Property Guide.
While Monaco comes first on the list, London is number two, New York comes in at number three, Paris is number eight whereas Singapore comes in at number 10.
A recent report by property portal propertyfinder.ae compared average rents for a two-bedroom apartment in different Dubai localities with similar areas in Paris, London, New York, Mumbai, Singapore and Sydney.
For instance, rents ranging between $2,500 to $3,000 (Dh9,000 to Dh11,0000) per month will fetch you a two-bedroom apartment in Al Barsha, Bur Dubai or Deira in Dubai.
For the same amount, you can rent only a studio in Charing Cross Covent Garden in London; a two-bedroom apartment in East Village, a borough in Manhattan, New York; a three-bedroom apartment in Cuffe Parade, an upmarket neighbourhood in South Mumbai; a one-bedroom apartment in Marina Bay, Singapore; or a two-bedroom apartment in 7th arrondissement of Paris, an area home to tourist attractions such as Eiffel Tower and renowned museums.
Meanwhile, a rent of $3,500 to $4,000 (Dh12,000 to Dh14,000) per month can get you a two-bedroom apartment in Jumeirah Lakes Towers or Dubai Marina.
However, the amount can only fetch you a studio in Marylebone, London: a one-bedroom apartment in Upper East Side, New York; a three-bedroom apartment in Worli, Mumbai; or a two-bedroom apartment in Orchard Street, Singapore.
Therefore, Dubai rents still offer more value for money than global cities. “Prime areas of London fall in the most expensive category. However, other cities such as Zurich, Hong Kong and Sydney rank higher in terms of rents,” said Robin Teh, country manager, Chestertons UAE.
Dubai apartments also typically offer larger sizes as well as lower rates per square metre.
“Singapore, for example, has a USD/per square foot rate of 3.36 per month, making it more expensive by approximately 48 per cent to Dubai which comes in at 2.27. This alleviates concerns that the city is outpricing itself on a global basis,” said Hussain Alladin, head of research, GCP Properties.
“The average monthly rent in London equates to approximately Dh11,720. So, it’s more expensive than Dubai which comes in at Dh8,368 a month. Singapore sits somewhere in between at around Dh9,300 a month,” said Jennet Siebrits, head of residential research, CBRE UK.
Drawing comparisons between cities based only on rental values does not provide a complete picture for landlords or prospective tenants. Any comparison must take into account factors such as build quality, views, location, median size, etc.
Citing an example, Alladin says: “Marina Bay in Singapore has an average rent per square foot of $3.24 per month; in Dubai Marina, it is $2.52. If we compare Marina Bay to Downtown Dubai, then the latter comes in at $3.07. However, this would not be an accurate comparison, as Downtown Dubai is the most expensive area in the city.
“Dubai Marina and Marina Bay are both on the waterfront, making them comparable, even though median two-bedroom sizes in Marina Bay are approximately 25 per cent smaller than Dubai Marina.”
Quality of construction and age of the building are also crucial factors to consider while comparing rents. “Dubai’s construction history barely spans two decades whereas the oldest building in London dates back to early 12th century. From a landlord’s perspective, maintenance considerations are going to be very different in these two cities,” said Safina Ahmad, head of residential agency, CBRE Middle East.
For buy-to-let investors, it’s also imperative to compare yields in various cities. These vary from city to city based on legislative and tax environments.
Tenants must also take into account what amenities are included in your rent.
“Swimming pools, gyms and residents’ lounges are the norm in Dubai’s residential towers. In London, these facilities would be limited to newer developments and the top end of the rental market,” Ahmad added.