Rising Rents Mean That New Tenants Will Have To Pay Much for Smaller Houses

The “Holiday Home Concept” Is Becoming Increasingly Popular Among Landlords.

As per real estate industry executives, UAE residents renting for the first time will likely pay more for smaller spaces. Due to an increase in rentals and a shortage of villas.

Since the pandemic imposed movement restrictions, there has been an increase in demand for larger apartments and villas. Even though Covid cases are decreasing and safety precautions have been relaxed, demand remains high. This meant that new tenants would have to accept the new reality of having paid more for less.

“New tenants entering the market must be aware that they will likely get less for their money. As compared to those who are already there and have bigger units, rental prices are rising daily. Although rent increases are inevitable, those who own larger apartments are more likely to hold onto them. Making smaller apartments more readily available “Provident Real Estate’s managing director, Morgan Owen, said.

He claimed that despite realizing that the changes they made during COVID-19 are “possibly more sustainable and cost-effective.” Many residents still choose to live in smaller apartments.

The lack of villas and townhouses, according to Ayman Youssef, vice-president at Coldwell Banker, UAE, “continues to drive prices up in the segment.”

“The demand for luxury serviced residences and apartments with views of the ocean is steadily rising. Even though this trend is less pronounced in apartments. On the other hand, the segment of real estate that is more affordable has seen a moderate price increase, “he stated.

Landlords Relocating To Vacation Homes

Owen continued by revealing that landlords are also embracing the “holiday home concept”. Because it offers them better returns and flexibility. Owen was speaking about recent trends in the resident market.

Additionally, he added, “landlords are beginning to understand the value of property management. And have a team or individual manage the property from beginning to end, making it easier for both landlord and tenant.”

According to Rao, there is also evident excitement among investors who now view vacation homes as a great model for maximizing rental income.

According to Shilpa Mahtani, from bnbme Holiday Homes, an owner of a vacation home can make between 10% and 50% more than someone who rents out a long-term residence.

“The biggest benefit is that homeowners can earn 25% more year over year once. Those who start renting out their homes, helped by good comments and our marketing,” she said.