Residential landlords in Dubai are no more as stringent on the number of rent cheques like earlier. Tenants have always cried foul over having to pay rent amounts in bulk in one or two cheques. However, with new supply coming to the market and rents declining marginally, four cheques is soon becoming the norm in the Dubai rental market.
“We are seeing the market shift to four cheques being the norm over one cheque and, as more supply hits the market, this trend will continue and we will most likely see the number of cheques increase to six or even 12 in the upcoming years,” said Sanjay Chimnani, managing director, Raine & Horne Dubai.
Although suburban communities are seeing more such incentives and attractive payment terms from landlords who are vying among each other to fill up units, there are the odd good deals in centrally located neighbourhoods as well.
“We are also seeing this trend in central locations such as The Springs and Dubai Marina. Since Q1 [first quarter], more than 50 percent of the rental contracts negotiated in The Springs and more than 40 percent in Dubai Marina were negotiated with four cheques,” observed Lynnette Abad, partner and head of Property Monitor at Cavendish Maxwell.
There is data to prove that incidence of four cheques is getting more common today. As per Property Monitor’s database of rental contracts from the leading agencies across Dubai, 40 percent of rental contracts agreed in July 2017 were with one cheque whereas 43 percent were agreed with four cheques. In July 2016, 66 percent of agreed rental contracts were with one cheque and only 4 percent were with four cheques.
“The top five areas where we are seeing four cheques are Remraam, Damac Hills [formally Akoya], Mudon, Jumeirah Village Circle and Dubai Sports City. We have seen this trend across all areas in Dubai, especially in suburban areas where new supply has been released. This trend started to gain traction in Q1 [first quarter]of 2017 which correlates to new supply released into the market,” added Abad.
Communities such as Sports City and Silicon Oasis are seeing landlords accepting multiple cheques. “In areas such as Downtown, landlords are still insisting on payments in one or two cheques,” reckons Mario Volpi, chief sales officer, Kensington Exclusive Properties.
This trend is more prevalent for apartments as villa landlords are still sticking more rigidly to one or two cheque payments.
“Villas, larger units in luxury developments and new developments have to be more flexible on rents and cheques. Affordable housing is still holding strong in most well-settled communities,” added Chimnani.
However, for those of you hoping to pay rent in 12 cheques, you may have to wait a bit longer. This trend was discernible in 2009 when the Dubai property market went through a lean patch.
“With the few exceptional cases, 12 cheques are definitely not the norm yet and we see this only from very motivated landlords. When a tenant is requesting this amount of cheque payments, the landlord’s response is generally not one of approval as this is seen as too radical with a fear that tenants might abuse the system and break payments in the future,” said Volpi.