Dubai-based real estate brokerage firm "W Capital" has confirmed that the number of new rental contracts in Dubai's real estate sector has reached a new peak since the beginning of 2023, which is a strong indication of the continuity of the market's growth momentum and reflects the effectiveness of the new regulations and incentives implemented by the Dubai government.
"According to DLD, 120,000 new rental contracts in the first four months of 2023 effectively means that investors have purchased 120,000 homes, with returns on investment ranging from 7% to 12%, depending on each region," said Walid Al Zarooni, CEO of W Capital.
According to Al Zarooni, this indicator shows that at least 120,000 families or individuals have started to settle in Dubai, which is reflected in all economic sectors and activities, including retail and transportation.
The CEO said that every sector related to economic development is directly affected by the rental sector, which is also usually an indicator of the future state of the local economy and the confidence of residents and investors in its prospects.
"Some observers may see the new contracts as a move to better residences within the emirate, but the data shows that tenants are stable where they are, with an increase in new leasing contracts in Dubai. At least 100,000 households are likely to have moved in during the first four months of the year.
Al Zarooni said there have been renewals, but the majority of contracts are new, accounting for about 80 percent of the total number of contracts registered since the beginning of the year.
He emphasized that Dubai's real estate sector has achieved excellent results in the past few months and the rental sector has shown sustainable growth.
Al Zarooni pointed out that the regulator of Dubai's real estate sector follows the best international standards to consolidate the sector's position, while focusing on transparency, dealer and investor confidence. This has had a positive impact on all products in the market, including the rental sector.
According to DLD, a total of 119,262 new contracts were registered in the first four months of 2023, including 32,347 in January, 31,153 in February, 31,747 in March and 24,15 in April.
The number of lease contracts renewed during the same period reached 150,387 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 Dubai is a major destination for tourism, investment, work and stability as it hosts millions of tourists and residents on long or short stays. This has revitalized the hospitality and residential rental sectors, and strong activity within the market is expected to continue in 2023.
He added that under Dubai's leasing law, the lease contract is a legal document that is binding on all terms throughout the term of the contract. Therefore, all parties are advised to read the contract carefully, ask for any hints that they do not understand and try to make changes in the contract to meet expectations and needs.
He also added that when signing a rental contract in Dubai, after agreeing to all the conditions and signing the contract, it is necessary to specify the number of checks to be paid in addition to the real estate agency's commission, if any, which does not exceed 5% of the annual rental amount. Receipts for all payments must be retained in addition to a copy of the rental contract signed by the owner, who should sign the housing receipt and all relevant documents.
