DUBAI // Ali Wehbe no longer has to worry about a 40-minute commute to his job in Media City; after keeping an eye on falling rents over the past half-year, he finally left International City and moved to Discovery Gardens, only 10 minutes from work. "It was more than just a move; it's an entire lifestyle change," said Mr Wehbe, 28, a Lebanese national who works in the television industry. "You feel like you're connected to life again, not separated from everything like before."
Now he pays Dh48,000 (US$13,000) in yearly rent for his studio, about Dh3,000 less than in International City, and has scores of perks including gym access and nightlife activities in Jumeirah Beach Residence (JBR). "I'm saving money on gas, car services," he said. "If I wanted to go out at night, the cab ride used to cost me Dh70 to Dh75; that's from Jumeirah Beach Residence to International City. Now a taxi to JBR is Dh20."
After the better part of a decade of soaring rents, prices are plunging, reversing a trend in which residents searched for affordable accommodation in the far corners of Dubai and even neighbouring emirates. Property analysts say they are now seeing increasing numbers of people like Mr Wehbe stream into centrally located places in Dubai having previously been priced out. Those who rented in Al Ain or Sharjah, where for years people were forced to commute on notoriously congested roads into Dubai, are suddenly moving into high-end flats in the Marina or JBR. Families are leaving cramped, two-bedroom flats for spacious four-bedroom villas with pools, yards and beach access.
Even people with jobs in Abu Dhabi, where rents are still high, are moving to Dubai and opting for the 90-minute commute. According to statistics provided by Landmark Advisory, a property consultancy firm, rents for one-bedroom flats in Discovery Gardens fell 41 per cent over the last six months. For one-bedroom flats in the Marina and two-bedroom villas in The Springs, they fell by about 32 and 39 per cent, respectively.
The decline compelled Dale Davis, 48, an American employed in the security industry, to move his family out of a three-bedroom apartment in the Marina. Mr Davis, who paid Dh240,000 a year for the 2,000-square-foot flat, had been considering moving into a villa last year but, because prices were higher, was reluctant. "At that point, I figured I'd probably have to move and I budgeted like Dh350,000 for a villa," he said. "I was like, 'Wow, this is probably going to wipe out any opportunity to save any money'."
But then prices eased. "I said, 'I'm definitely going to move to a villa,' because now I have two incentives: one of more space but also the fact that I rent a villa for cheaper than I'm paying now. "I realised that when I started seeing villas and apartments for Dh200,000 and Dh220,000." This month Mr Davis signed a contract for a four-bedroom villa in Umm Suqeim with a swimming pool and about twice the space of his apartment. The yearly rent? Dh180,000. "I think Dubai's become a much nicer place to live in the last six months, if you can keep your job," he said.
Falling rents are also shifting bargaining power from landlords to tenants, property analysts say. Certain tenant-friendly perks are increasingly being written into contracts - shorter notification dates for breaking leases or monthly rental payments instead of up-front yearly checks - that would have been impossible eight months ago. "There's a lot more negotiation power available to the tenant, but that will depend on the landlord's motivation and approach to this," said Jesse Downs, head of research at Landmark Advisory.
"Some are being more stubborn but others are being more flexible, but definitely there's a shift in the balance of power."
hnaylor@thenational.ae