Dubai has become more competitive and attractive for those working in the UAE due to the reduction in residential rentals. Residents moving to Dubai from locations such as Abu Dhabi and Sharjah are most likely reason for a 7.6 percent rise in the emirate’s population last year. Jones Lang LaSalle (JLL), an expert from real estate consultancy Jones Lang LaSalle has claimed, “The major driver for this ‘Dubai Effect’ has been the reduction in residential rentals, which has resulted in Dubai becoming more competitive and therefore attractive for those working in the UAE. “The other component of the ‘Dubai Effect’ is an increase in the number of households, as falling residential rentals are reducing the need for several households to share the same unit. The total demand for residential units is therefore increasing more rapidly than the overall population of Dubai.”
While the increase in demand was certainly good news for landlords, it was important to recognise that it is very dependent upon the level of rentals, with increased demand being driven largely by falling rental prices. Jones Lang LaSalle has said it expects rentals to stabilise in some projects and locations in 2010, but that the overall level of residential rentals will decline further in 2010.
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