With residential rent rates in Dubai on the decline, overseas Filipino workers (OFWs), who have grown used to pooling their resources together so they afford a decent studio-type or one-bedroom flat, are looking to level up.
To this end, ServiceMarket, a marketplace for moving services, which estimates that tenants move every 2-3 years, recently conducted a survey to find out why Dubai residents moved in the past six months.
The study revealed interesting findings most OFWs, especially those who group together and rent a room, could relate to:
Contrary to what you might expect, most Dubai residents who moved rented bigger homes in 2018, according to the ServiceMarket.com study.
“Previously, when rental rates were going up, we saw a trend where people were moving to the newly developed suburbs of Dubai to get better value for money. But the emerging trend is to leverage the declining market by staying within the property for longer and renegotiating rates, or moving to a larger property for the same rate,” said ServiceMarket in a report about its findings.
Noting that rental rates have been declining due to oversupply, the study found out that 61.4% of Dubai residents who moved did so to upsize their homes; 16.2% downsized, and 23.4% moved into a house with the same size.
“Rental rates have been decreasing due to increased supply of new units, enabling an increasing number of Dubai residents to move to bigger and better homes. It has also become easier for growing families to find bigger homes that fit within their existing budget,” said ServiceMarket, noting that over 80% of those who moved during the last six months lived with their families.
In general, Dubai residents who moved are paying lower or same rent even though most of them moved to larger units. Only 35.5% of them are paying higher rents. With such economic trends, it’s hardly surprising that only 29.9% of Dubai residents moved to cut down the cost of rent in 2018. Many tenants are now “right sizing”, which means that they can move to apartments that were out of their reach earlier due to budgetary constraints. Compared to the previous years, Dubai residents are getting much better value for money for their rent in terms of the size and quality of their homes.
Real estate experts, citing oversupply, said Dubai will continue to experience a decline in commercial rental rates. As a result, a one-bedroom in Deira, an OFW enclave, can now be fetched for Dh48,000, which is down from Dh68,000.
In the Al Rigga area of Deira, flat operators interviewed by The Filipino Times said the goings rates are Dh70,000 a year for relatively new studio-type units, which are a favorite option for groups of three to four OFWs sharing the quarterly payment of Dh17,500, or approximately Dh1,458 a month for each.
The rate goes even more lower outside Rigga where studio-type units go by Dh34,000 a year or around Dh8,000 every quarter.
Asking price for two bedrooms starts at Dh100,000 on busy Rigga and Dh65,000 in nearby streets. These are usually an option for OFW families.