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19 March 2024

Karama rents rise; Dubai index @ Dh40,000 pa for studio

Published
By Parag Deulgaonkar

Asking rents in Karama, a neighbourhood preferred by Asians, have gone up between five and 10 per cent in the last three months, according to market listings analysed by Emirates24|7.

Studio apartments in the area are currently being leased for Dh55,000 to Dh65,000 per annum (pa), one beds between Dh75,000 and Dh85,000 pa and two beds between Dh85,000 and Dh110,000 pa, reveals online and print listings scanned by this website.

The latest update of Real Estate Regulatory Agency (Rera) rent index, however, puts rents for studio units at Dh40,000 to Dh45,000 pa, one beds at Dh55,000 to Dh70,000 pa and two beds at Dh80,000 to Dh90,000.

The index, which is updated every four months, is almost 17 to 37 per cent lower than the current asking lease rates.

Amer Khan, Residential Consultant, Business Bay Office, Better Homes, puts the rental increase to between three and five per cent.

“There has been an increase of three and five per cent mainly because these areas are in high demand due to their location in the heart of the city and the availability of a very convenient transport system.”

Rahuveer Tandom, who works as an accountant with a local bank, says: “I am confused… the advertised rates are much higher than those mentioned by the Rera rent index. Landlords don’t agree to the rent index rates saying ‘they are free to ask for any rent from new tenants’.”

Though Tandom leased a two-bed for Dh87,000 pa, he suggests: “There has to be some kind of limitation on landlords when it comes to asking rents from new tenants. I think (Rera) should introduce a slab that makes it mandatory for landlords to not ask for rents exceeding a certain percentage higher the rent index.”

Karama is a leasehold area in Dubai, which means only nationals from Gulf Cooperation Council countries can own properties.

Even during the period between 2008 and 2011, rents in the area had remained higher than many freehold areas of Dubai since there was less supply and high demand particularly from Asian nationalities.

Khan believes rents will climb as demand is quite higher than supply in Karama.

“There is an expected increase in rents, even though there has been a slight slowdown in the leasing market, but the demand for residential units in these areas is in general on the increase,” he asserts.