Dubai: Rent-To-Own Market Gaining Popularity Again Amidst Surging Rentals
Date
5/26/2024 2:55:41 PM
(MENAFN- Khaleej Times) Surging rentals have breathed new life into 'rent-to-own' properties, and this concept is once again gaining popularity.
As rents continue to rise in most areas, some communities are witnessing rent stabilisation following a three-year rally, driven by high demand from the rising population, which reached 3.696 million on May 25.
Rent-to-own programmes are quite popular and beneficial in those areas of Dubai where prices are quite high as they allow people to own their dream homes with relative ease and also save on rentals.
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The Real Estate Regulatory Authority (Rera) adjusted its rental calculator in early March, prompting many tenants to explore strategies for managing housing costs and achieving long-term financial stability. One such approach is to pursue homeownership through rent-to-own programmes. This not only allows renters to build equity but also potentially stabilisess their monthly expenses, a factor that can instill confidence in landlords about the financial security of their investment.
Data from property management firms in Dubai suggests a rise in rent-to-own arrangements in 2024, particularly in upscale neighbourhoods like Downtown and Dubai Marina, alongside mid-range areas like Jumeirah Lake Towers (JLT) and Jumeirah Village Circle (JVC).
“By transitioning to ownership under a 'rent-to-own' plan,” Sachin Kumar Singh, business head and managing partner at Foremen Fiefdom, said“tenants lock in the current market price and avoid potentially significant rent increases in the coming years. This creates stability and financial predictability, especially appealing for those with long-term goals of homeownership.”
Sachin Kumar Singh
The rise of these trends is seen as a balancing act by both the landowners and the tenants in finding a common ground that helps either party on a satisfactory note.
“The 'rent-to-own' option is also gaining traction again, offering a path towards eventual ownership for qualified renters... Dubai's surging rental market has breathed new life into the 'rent-to-own' concept. This trend allows tenants to identify a property they like and negotiate ownership with a willing landlord. The agreements often come with flexible payment structures, making them attractive to aspiring buyers who might not have the full down payment upfront,” said Singh.
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