Property service fees in the area may be affected as a result of developers and community managers offering free cleaning and maintenance services to residents following the unusually heavy rainfall in Dubai last month.
Responding to the Rainfall Crisis
In response to the unprecedented rainfall experienced in Dubai last month, developers and community managers are extending a helping hand by offering free maintenance and cleaning services to residences. This initiative, mandated by the government, aims to alleviate the inconvenience faced by residents, particularly in areas severely affected by the rains.
Prathyusha Gurrapu, Director and Head of Research and Consultancy at Cushman & Wakefield Core, anticipates that this gesture may result in an increase in service charges and insurance premiums in the short term.
Addressing Oversupply Concerns
Several leading developers in Dubai, including Emaar Properties, MAG, Damac Properties, Nakheel, Dubai Holding, Union Properties, and Dubai Investment Park, have pledged to provide complimentary services to tenants impacted by the heavy rains. This assistance extends to residents in prominent areas such as Business Bay, Downtown, Jumeirah Beach Residence (JBR), Jumeirah Lake Towers (JLT), International City, Palm Jumeirah, Damac Hills, Dubai Marina, Mudon, Discovery Gardens, Remraam, and Arabian Ranches, among others.
Gurrapu emphasizes that the manner in which community management challenges are addressed in the aftermath of heavy rains will influence decision-making processes for both buyers and tenants. This influence may extend to factors such as location and pricing.
Despite concerns about potential oversupply, Gurrapu asserts that the residential property market in Dubai remains stable. While significant project launches may affect supply-demand equilibrium in the future, current delivery figures align with forecasts, with no immediate oversupply threat.
According to data from Cushman & Wakefield Core, there is a consistent upward trend in city-wide rents, marked by a 20% year-on-year increase and a 72% rise compared to Q1 2020. However, Gurrapu notes that household incomes are not keeping pace with rising rents, leading to a squeeze on disposable incomes. Consequently, there may be an uptick in end-user purchases, particularly in the ready market, as mortgage costs are expected to moderate in the coming quarters.
Gurrapu also highlights the recalibration of the Real Estate Regulatory Authority's (RERA) rent calculator, aimed at aligning rental prices with market rates. This adjustment is anticipated to reduce disputes over rental increases and promote fairer rental practices.
Overall, while challenges persist in the aftermath of heavy rainfall, concerted efforts from both the government and private sectors are underway to mitigate the impact and ensure the stability of Dubai's residential property market.