“W Capital”, the Dubai-based real estate brokerage, confirmed that the rise in the number of new rent contracts within the real estate sector in Dubai since the beginning of 2023 peaking to a new record, is a strong indication of the continuation of the growing momentum within the market, reflecting the effectiveness of new regulations and incentives applied by the government of Dubai.
“The additional 120,000 new rent contracts during the first four months of 2023, according to the DLD data, practically means 120,000 units purchased by investors with an return on investments ranging from 7 to 12%, depending on each region,” said Walid Al Zarooni “W Capital” CEO.
Al Zarooni believes that this indicator shows that there are at least 120,000 families or individuals have begun to settle in Dubai, which is reflected in all economic sectors and activities, including the retail sector and transportation.
The CEO stated that every sector linked to the economic development is directly affected by the rental sector, which is usually an indicator of the future state of the local economy and the prospects of residents and investors’ confidence in it as well.
“The new contracts may be seen by some observers as shifting to better homes within the emirate, but the data show that the tenants are stable in their places, and there is an increase in new rent contracts in Dubai. It is likely that at least 100,000 families have moved in during the first four months of this year.
Al Zarooni indicated that there are already renewed contracts, but the majority of contracts are new and represent approximately 80% of the total contracts registered since the beginning of the year.
He stressed that the rental sector is showing sustainable growth in conjunction with the exceptional performance achieved by the real estate sector in the emirate during the last few months.
Al Zarooni pointed out that the Dubai regulatory bodies in the real estate sector follow the best international standards to consolidate the position of the sector, with focus on transparency and dealers and investor confidence alike. This is positively affected all products within the market, including the rental sector.
According to the DLD data the first four months of 2023 witnessed the registration of 119,262 new contracts, with 32,347 contracts in January, 31,153 contracts in February, 31,747 contracts in March and 24,15 contracts in April.
The number of renewed rent contracts during the same period reached 150,387 lease contracts, as follows: 42,376 contracts in January, 37,263 contracts in February, 39,635 contracts in March, and 31,113 contracts in April.
Al Zarooni said that Dubai represents a major destination for tourism, investment, work and stability for a large segment of people, as it hosts millions of tourists and residents who stay for long or short periods. This revitalizes the hotel sector and residential rentals, and it is expected that the strong activity within the market will continue during 2023.
He added that the rent contract is a legal document that is binding on all its provisions throughout the contract period in accordance with the rental law in Dubai. So all parties are advised to read the contracts carefully, inquire about any tip that is not understood, and try to make the amendment in the contract to suit expectations and needs.
He also added that when concluding a rent contract in Dubai, after agreeing to all conditions and signing the contract, and specifying the number of checks to be paid in addition to the commission of the real estate agency, if any, which does not exceed 5% of the annual rent amount. All receipts for the amounts must be kept, in addition to a copy of the rent contract signed by the owner, who should sign the receipt of the housing unit and all papers related to it.