Russian Influx Drives Up Rental Prices In Dubai

Dubai has been experiencing skyrocketing rental prices since last year for the time being. This has raised the average cost of living in Dubai.

It is actually becoming difficult for people to look for homes. Many residents of Dubai have remarked this is the toughest phase in the last 10 years. People have been looking for new homes in Dubai as the Rentals of the places they lived at are beyond their paying capacity now.

They are ready to live in smaller homes with higher rents. The crisis in Dubai has worsened ever since the commencement of the Ukraine war. It has increased the influx of wealthy Russians to Dubai due to which the demand for property has been rising. 

Rental Prices in Dubai have been hiked due to the increasing demand for property

The hike in the rentals has been more than the comprehension of the individuals. The rentals have increased by 75%. This increase has been reported for almost all the properties in the mediocre and high-profile societies of Dubai.

The situation has become gruesome for the people to accept. People are migrating from one place to another in the search of affordable housing solutions but they have not been successful at all. The issue has been more aggravating for migrants who live in Dubai only leasehold properties.

The war between Russia and Ukraine has been the primary cause behind the exponential increase in rentals in Dubai. The wealthy Russians consider Dubai a tax haven and therefore are withdrawing their funds from their investments in Russia and pooling all these funds in the real estate sector of Dubai.

According to the statistics, there has been a 28% increase in the demand for apartments and villas in the last year. The demand has come basically from the Russians. The exchange rate with the Russian currency has been strengthened since then.

Since the demand for properties is increasing, the rentals are also increasing. A property consultant in Dubai has recently tweeted that the demand for rental properties is four times the supply of the same. This was the situation before the arrival of the Russian people in Dubai.

After their arrival, the situation is likely to worsen and hence the paucity of rental properties is likely to drive the prices to the next level. The government of Dubai has taken cognizance of this crisis and is evolving a strategy to mitigate the side effects of the same. 

However, the situation seems to be otherwise for the time being. As a result of all of these developments, the real estate sector of Dubai has benefited to a great extent. But the changes have not been very favorable from the perspective of a less. The average price of renting an apartment has increased by 35%. There has been a 50% increase in the rent for villas.

This was not even the situation during the pandemic as the rent for the leasehold properties in Dubai increased by a maximum of 20% only. There has been an increase in the rent of the properties and in addition, the property dealers seek to further impose higher Maintenance and security charges on the tenants. All of this is adding to the hardships of the people so far. 

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This is a clear violation of the anti-price gouging laws in Dubai. These laws were enforced in Dubai in order to deter and prohibit landlords from charging extraordinary rent for properties in Dubai. In fact, these laws have set the maximum limit up to which the rent could be increased in a given financial year.

The recent amendment to the law allows landlords to increase the rent by 20% in a year. Any increase in the rent beyond that is against the law. In addition, it is important to mention that the rent could be increased only after taking note of inflation and other economic aggregates. 

The landlords do not have the right in Dubai to evict a tenant forcefully. Therefore, he needs to have a good reason to evict the tenant. Refusal of the tenant to pay the rent which has been increased beyond the permissible limits would never be considered to be a good reason to evict the tenants from the properties.

The people of Dubai have been very much affected by all of these recent changes. The biggest problem is being faced by the migrants who constitute around 67% of Dubai’s population. In light of these circumstances, the time has come for the Dubai authorities to take an action against the private landlords and impose strict penalties on them for such misconduct.