Property owners in Dubai on average earn over Dh13,000 or 41 per cent more than tenants, reflecting a significant difference in income, according to a new study.
Released by real estate consultancy Betterhomes, ‘The Future Living: The Dubai 2024 Edition’ showed tenants’ average income is Dh32,303 while property owners earn Dh45,616 a month.
The consistent rise in rentals over the past three years has boosted property owners’ income.
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As of June 2024, rents for average apartments and villas in Dubai stood at Dh127,969 and Dh354,512 per annum, respectively. Over this period, the highest annual rents for apartments and villas were respectively found in Palm Jumeirah, with asking rents standing at an average of Dh279,826; and in Al Barari, with rents reaching an average of Dh1,344,844, according to real estate consultancy CBRE’s second-quarter report.
“The rate at which rents continue to grow remained unwavering, as average residential rents grew by 21.1 per cent throughout the year until June 2024. This increase has been driven by a 22.2 per cent growth in average apartment rents and a 12.7 per cent increase in average villa rents,” the report said
Global human capital consultancy Mercer has projected that salaries in the UAE are projected to increase faster than the rise in inflation rate in 2024 on the back of increased demand for talent and growth in the overall economy.
The average salary in the UAE is expected to increase 4 per cent this year as compared to a 2.3 per cent rise in inflation, it said earlier this year.
Betterhomes’ income analysis showed that 63 per cent of respondents earn Dh50,000 or below per month.
The survey is based on a comprehensive survey of over 1,600 residents, ranging from renters and homeowners to investors. It identified millennials (aged 28 to 43) as the dominant demographic, comprising 56 per cent of respondents.
Millennials leading home ownership
As Dubai’s population becomes more diverse, so do their housing needs and investment priorities. The report revealed that millennials, particularly those aged between 28 and 43, are leading the charge in property ownership and rental markets, with many keen to capitalise on the city’s rising property prices and robust rental yields.
While renters make up a large portion of Dubai’s population, the survey revealed a growing interest in home ownership, indicating a clear demand for buying options in the city.
The report by a property brokerage firm revealed that 77 per cent of respondents currently rent their residences, with a significant portion – 79 per cent of tenants – opting for long-term lease agreements. This highlights the transient nature of Dubai’s population, where flexibility and lower financial commitments drive the rental preference.
90% want to stay for five more years
Betterhomes’ survey found that the majority – 72 per cent – of the Dubai residents have lived in Dubai for more than 5 years and nearly nine out of 10 – 89 per cent – plan to stay in Dubai for at least five more years in the emirate.
The study reflects a notable shift in the longevity of residents’ stay in the emirate.
Previously, Dubai’s expatriate population’s nature was transient as professionals used to migrate to Western countries to obtain second passports. Since the UAE introduced a variety of long-term residency programmes such as the Golden Visa, Silver Visa, Retirement Visa etc., people tend to stay in Dubai for a longer period in the post-pandemic period.
This has been reflected in an increase in the emirate’s population which reached 3.779 million, the highest ever in September.
Sharing his personal experience, Richard Waind, CEO at Betterhomes, said: “When I first arrived in Dubai, I, like so many, viewed Dubai through the prism of a short-term experience. Somewhere to work and live for two or three years, but ultimately somewhere to move on from. It is clear from the survey that the vast majority of residents, my own family included, no longer hold to this view.”
“Dubai has become a place we call home, where we’ve put down roots, grown families, opened businesses, and bought homes. This dramatic change is reshaping the real estate landscape of Dubai and gives me tremendous confidence for the future sustainability of the market,” he added.