Rental Market Report across UAE in 2022

It looks like the UAE real estate market, including properties for sale in Dubai, is continuing its upward trend in 2022 as well.  Positivity in the market tone, economic growth and new capital inflow have led to an increase in property transactions, both with regard to prices as well as rents.  

Additional space: The global effect of the pandemic has left its mark on the UAE as well.  During the lockdowns, many people worked online, from home, which set the trend for the “race for space”.  Larger accommodation with more outdoor space for recreation led to a surge in interest in villas and more spacious apartments.  This trend continues and, according to one authority, they “expect at the current pace, citywide villa market rents to reach the 2014 mark by the end of this year and apartment rents following through.”

Rent increases: Some landlords are taking advantage of the situation, especially for new leases and renewal of leases, by hiking rents.  However, the RERA (Real Estate Regulatory Authority) Rental Index helps landlords and tenants to ascertain whether or not a proposed rental increase is allowed.  In some emirates, the law does not permit the landlord to “increase the lease amount for a period of three years from the date of lease contract or the last instance where the rent was increased.  Further, for the landlord to increase the rent, he must send a written notice” within a specified period in advance of the expiry date of the lease contract.  

Government incentives: The following programmes initiated by the government have been welcomed:

Residency permits for retirees: Long-term 5 year visas are permitted for retired residents above 55 years.  These are stipulated by the retiree either investing in a property worth AED 2 million or having an active income of at least AED 20,000 per month or financial savings of a minimum of AED 1 million.

Visas for remote workers: This 1 year visa programme allows people to live in the UAE while continuing to work remotely for employers in foreign countries.  There are conditions for the virtual working programme:

Employees need to have and provide:

  • proof of employment with a current contract valid for one year,
  • Minimum salary income of USD 5000 per month
  • Salary slip for the previous month and bank statements for the last 3 months.

Company owners need to provide proof of ownership of the company for the previous year      along with the other two requirements mentioned above.

10 year Golden visa programme:  Additional benefits have been added to this long term residency permit which enables foreigners to live, work or study in the UAE.

  • an entry visa for six months with multiple entries to proceed with obtaining a residence permit
  • a long term 10 year renewable residence visa,
  • a self-sponsored visa, with no requirement for an employment sponsor
  • ability to stay outside the UAE for more than the normal period of six months in order to keep their residence visa valid
  • Sponsorship of family members, including spouse and children with no age limit
  • Sponsorship of any number of domestic helpers
  • allowing family members to stay in the UAE until their permit expires, even though  the primary holder of the Golden visa passes away.

Foreign investment:  The valuable property market in the UAE, due to the stable and strong economy and conducive investment policies, continues to attract foreign investors. There are many benefits for such investment:

  • Protection from intervention
  • High rental income and easy sale of property
  • Top infrastructure and global connectivity making it business-friendly
  • Income free of tax.

The thriving oil prices and surge in shares of the DEWA IPO (initial public offering of the Dubai Electricity and Water Authority) have added to the economic stability, making it all the more feasible for foreign investment.  With free travel allowed, it has made it easier for foreigners to visit and invest in property. 

Rental market:  While most emirates showed an upward trend in rents, Abu Dhabi recorded slight decreases for apartment and villas in the affordable areas while the “luxury segment” showed a rise in rental prices.  In Sharjah, some of the popular areas have remained rent stable while others have shown an increase.  Dubai has shown that budget tenants have looked for more family-friendly accommodation in the suburbs, while luxury areas have seen an upward trend.

Construction:  This sector is vital to the growth of the economy and it is expected to see quick growth in the future.  There is a focus on smart and metaverse cities with plans to digitize many government services.  The Energy Strategy 2050, Expo 2020, Dubai Tourism Strategy and the Sheikh Zayed Housing Programme have also contributed to the further development of the construction industry.  With the additional attraction of foreign investment, the construction market is being driven to meet the demands.

Conclusion:  The Rental Market Report across the UAE so far this year has been promising, with a rise in rental demand as well as rates for the same.  The government initiatives have added to the flourishing rental market.  Despite gale forces such as high inflation and increasing interest rates, the real estate market across the UAE is all set to meet and overcome the same.