Saturday, February 15, 2014

Rent!

It may not have made the international news yet, but believe me, it's pretty much all anyone is talking about in Dubai at the moment - the fact that a combination of financial recovery, optimism brought about by Dubai's Expo2020 bid win, and, sheer determination by a lot of investors to earn absolutely pots of money, mean that that property market in Dubai has once again gone completely berserk.

Dubai landlords can be an excitable bunch anyway, but of recent, there seems to have been a herd mentality that has led to them to once again start asking for absolutely bonkers rents for properties in Dubai, as this story will show you. In case you can't be bothered to click the link, we're talking 50 per cent rent increases, with the area that him indoors and I live in, Downtown, one of the worst affected. We had a rather stressful battle with our Averagely Revolting Landlord who tried to impose a giant rent increase on us last year. Averagely Revolting Landlord reluctantly realised the law was on our side and accepted a small rent increase, then, sulkily sold the apartment to Profoundly Revolting Landlord, who has behaved like a repulsively putrid, fulsomely foul swamp toad of the highest order in order to get us to leave without giving him any bother. This post is a bit of an indication of what he is like. He has won. Mainly because the old landlord wrote enough pseudo-legal caveats into our current contract to make sure we have to leave unless we agree to pay whatever ludicrous rent increase the new one feels like charging, but also because we would actually like more space than our current place has, and, to not live in the 22nd floor for a while.

Another reason that I've relented is that this man is such a gruesome, foul, turd of a man, that the idea of giving any more of my hard-earned cash to him makes me want to hurl myself from aforesaid 22nd floor. I refuse to speak to him any more because I feel that anyone who has the kind of attitudes to women that this man has displayed isn't worth the effort it would take to summon enough spit to gob in his face. But, he hangs around on a sofa in our lobby, suppurating like Jabba the Hutt, because he manages several apartments in our building and is often here taking care, or not taking care, (if his attitude to maintenance of our place is anything to go by) of business. So, unfortunately I have to see him fairly regularly.

You may remember that him indoors and I suspected mental rent increases were about to happen, as we watched the fireworks exploding from the Burj Khalifa on the night the Expo win was announced. The signs were there pre-him indoors' final showdown with Profoundly Revolting Landlord in the form of news stories like this, from Arabian Business, taken from 7Days. Click here.

If you don't click on any of my other links, I would urge you to read that one, as, it pretty much sums up the situation as far as tenants are concerned in Dubai, and, to be fair, Abu Dhabi, and increasingly, the Northern Emirates.

What I mean by that is this: I have been well aware since arriving in the UAE that Dubai landlords are not like him indoors and I, who are also landlords. We have had the same tenants in our Ealing flat since we left the UK more than three years ago. We have imposed one rent increase which they agreed to pay. We asked them to pay another last time they renewed, they said they would leave if we insisted. We decided on balance to keep them on at the same rent: They're good tenants, they don't ask for much in terms of maintenance, they pay on time, we don't want the flat empty because there's a hefty mortgage and so on.

However, flats sitting empty in Dubai for months while landlords chase increasingly ridiculous rent yields is par for the course, it would seem. I suspect this is possibly because many of them bought cheaply off plan for cash, or don't need to worry about the flat being empty because the rent yields are enough to see them easily through a few mortgage payments. And, because they bought determined to make loads of dosh, so they will bloody mindedly chase loads of dosh, whether or not it makes business sense and finally, because they don't care about the tenants who they unceremoniously turf out of their homes on a yearly basis.

What that Arabian Business article has taught me, and this will probably not be a surprise to most of you, is that it's not that those in the property industry here don't care about the people who are being kicked out in favour of people with big salaries who can pay bigger rents, they actively resent us.

In a way, you've got to admire honesty of the man quoted by AB, there's no way his equivalent in the UK would ever say something like this because he would have been PR-trained into submission for fear of being pilloried in the media:

"But I say to that person: You were not supposed to be living in Burj Khalifa . Because if you were working in London, at your salary, which falls in the average salaries of London, can you live in Knightsbridge? You cannot. You will take the tube, live half an hour away from the city and commute - just like all the employees,” he added.

I don't live in the Burj Khalifa, although I have a fine view of it from my lounge window meaning my flat is now considered "very desirable" in terms of Dubai property. So what he's saying does apply to me. And what he's effectively saying is this:

"Gwarn, you low paid people. You people without big private incomes or trust funds, those of you who are not corporate lawyers, oil workers, finance directors, bankers and so on. Get out. You've had your fun living in a posh area in a nice place while the Dubai economy was in the toilet, now will you kindly p*** off to some bland suburb where people like you actually belong. And close the door on your way out so none of you can creep back in. Thanks."

He has a point, I suppose, these buildings weren't built for low-paid journalists, booze salesmen, teachers and the like, they were built for people who can afford something approaching Knightsbridge rents. Although, I can't help but feel there are fewer people that can afford Knightsbridge rents in the world than developers in Dubai seem to think there are... Also, I can't help but feel that likening Dubai, a city that's sprung up in a  matter of decades, with Knightsbridge, an established area of London that has extremely expensive properties in a market that's built up and sustained over centuries, may be asking for trouble.

What can you do? Well, first of all, it's best to have a laugh about it, and thanks to the Pan Arabia Enquirer, it's possible to do that. Once you've been through the stages of grief, hysteria, denial and anger, you come to the acceptance part.

Staying in our place would mean an ugly battle, starting with reporting the landlord to RERA, the property industry's regulatory body. Even if we won a case against him, I hate to think what Profoundly Revolting Landlord's behaviour would be like over the following year. It does mean that he has won by bullying us out of our home, but, when it comes down to it, does anyone really want to live somewhere where the owner of the property wants you out so badly he's prepared to shout threats of getting lawyers on you in your own building lobby? The answer is no. I'm bloody minded, but not that bloody minded.

So what of the future? Well, a lot of our friends are leaving Dubai. For most of them, the rent increases were the tipping point on their decision to leave, as many of them have been here five years or more - a point at which this place starts to send you slightly mad. Some people will fight to stay in their homes in nice areas, then, next year, like us, relent and find somewhere in one of those bland suburbs Mr El Chaar was implying that we should all move to, because the fact is, although rent increases are still capped, the legally allowed maximum of 20 per cent may prove too much for many.

It's not all bad news. The bland suburbs are not as bland as they could be and there is news that, no doubt seeking to cash in on the recovering market, a lot more new residential property will be completed this year than in previous years, so more supply to meet the demand may mean that landlords won't be able to hike rents as much as they did last year.

In the mean time, I feel like the final scene of Lord of the Rings, Return of the King, when the elves and Gandalf, Bilbo and Frodo get on the swan boat into the West, such is the exodus of those of moderate income from Downtown. Except we will be heading not West but in in a sort of South Easterly direction, away from the coast, where the more expensive properties are, and into the desert where new suburbs are being built. And, of course, there won't be any tearful hobbits waving us off, only landlords and property investors, gleefully counting their money, in our wake.




4 comments:

  1. I for one welcome/urge you to the bland suburb of tecom. It ain't pretty but it does boast a Subway restaurant, several hotels, a Carrefour, a Geant, a metro station... and colourful nightlife. From my balcony I regularly see 3am fistfights between drunken British youths and there is a thriving prostitution industry. No-one does Downtown anymore...keep it real Lillywhite. Peace.

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    1. Har. I don't really think of Tecom as a suburb, more of a ghetto ;)

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  2. This comment has been removed by a blog administrator.

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  3. Real estate in Dubai is booming!! All the corporate giants have their eyes fix on the real estate. It wont be a surprise if there is a rise in the property rents.

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