Demand for IC apartment rentals still strong and growing fast

[vg100]

Hi All,

According to yesterday's article in ArabianBusinessdotcom website, the third most popular area for rentals in Dubai is International City.

It states that IC accounted for 19 percent of apartment rentals in Dubai in the Second Quarter of the year. However, they had only accounted for only 2 percent in the previous quarter! That seems like a massive sudden increase in rentals in IC. Continued growth in demand for IC apartments like this has to be good news for the area.

I assume this is because of the current economic situation and people are having to downsize or relocate to less expensive areas like IC.

If this is the case, there may be a chance that strong demand of apartments in IC may help slow down the diminishing rentals which we have seen in the last few months. I know from my own experience that the rental for a 1BR apartment in IC had dropped by 25% this year.

I was just interested in everyone's views on this matter and on the future of IC as an investment.

I Look forward to hearing your comments.

VG

 

[georgihh]

Hi All,

According to yesterday's article in ArabianBusinessdotcom website, the third most popular area for rentals in Dubai is International City.

It states that IC accounted for 19 percent of apartment rentals in Dubai in the Second Quarter of the year. However, they had only accounted for only 2 percent in the previous quarter! That seems like a massive sudden increase in rentals in IC. Continued growth in demand for IC apartments like this has to be good news for the area.

I assume this is because of the current economic situation and people are having to downsize or relocate to less expensive areas like IC.

If this is the case, there may be a chance that strong demand of apartments in IC may help slow down the diminishing rentals which we have seen in the last few months. I know from my own experience that the rental for a 1BR apartment in IC had dropped by 25% this year.

I was just interested in everyone's views on this matter and on the future of IC as an investment.

I Look forward to hearing your comments.

VG

One bedroom apartment is 40-43k per year. Even if the price goes down to 35k the investment is pretty much sounding. The current price is 400k – if you net 30k per year this is at least 7 % net profit. The community is getting established and is located at a very strategic place. Nakheel has tried to overbuild the place but thanks goodness they are going away.
If you have extra 220k$, buy two one bedroom flats and enjoy the income.

 

[mk2301]

Hi all,

I disagree. The area has come up a lot but it i still quite isolated from the rest of dubai. Ialso think ther is not much rental demand. My apt has been empty for near 2 months and i have not even had one e-mail query.

 

[georgihh]

Hi all,

I disagree. The area has come up a lot but it i still quite isolated from the rest of dubai. Ialso think ther is not much rental demand. My apt has been empty for near 2 months and i have not even had one e-mail query.

What have you got and how much are you looking for?
If your price is reasonable – will be no problem renting it out
One bedroom should be around 40k and studio 28k. The other communities will not drop prices and this is the advantage of IC – gets all the low earners and the business goes on.
During recession or whatever they call it cheaper is always better than expensive

 

[mk2301]

i am even willing to go for 40k for my one bed with 2 cheqs any takers?

 

[stumbled]

One bedroom apartment is 40-43k per year. Even if the price goes down to 35k the investment is pretty much sounding. The current price is 400k – if you net 30k per year this is at least 7 % net profit. The community is getting established and is located at a very strategic place. Nakheel has tried to overbuild the place but thanks goodness they are going away.
If you have extra 220k$, buy two one bedroom flats and enjoy the income.

I wonder where people out here get their facts. I just returned from a 2 week holiday and DUBAI IS A GHOST ToWN....taxis plentyful compared to last year, shops throwing goods at cost price just to make a sale, hotels empty, all the dhow cruises,desert safaris less than half price and above all the dubai airport was dead, i hardly saw the passengers, never have I seen a place so dead.

Anyways, where do you get your figures of 7%??? I get a feeling either people don't know how to run a business and it just goes to show what sort of people have invested into properties.

Ok majority of the people have to borrow money for investments and banks are lending at 8%+ minimum, then comes the maintanence of the property which is atleast 2-5%, then if you don't live in dubai you have to pay taxes on the rental income,wear and tear,vacant property,travelling costs to visit and finalise property purchase, staying costs....etc etc.... 7% isn't the NETT figure, now is it?? Its a wishful figure. If you do your home work it would cost you like 11-15%, JUST TO BREAK EVEN. Yes if you have plenty of cash you could invest your hard earned cash into it and sit back, rather than leaving it in the bank. Or buy Astra zeneca, gsk or a blue chip stock in the UK which gives you a divident of 6-9%.

Let me show you how you make money in this trade. Lets assume you have $100k , from which you can buy 1 property and get 7 % gross return. But if you use that as a deposit and get in as a buy to let loan then you could use this as a 20% deposit,hence you could raise $500k and buy 5 properties and then you can cut costs, bargain maintenance fees and get a better return.
Now do your calculations and remember your investment is only 100k and the appreciation in your capital on the other 4 properties is a bonus and the total return on 5 properties would be a much higher one on your initial deposit of 100k.

 

[Golden]

IC is still in demand and there are a lot of good agents who can get you a reasonable rental. I rented my apart through Fair Deal, 050/2616207

 

[stumbled]

IC is still in demand and there are a lot of good agents who can get you a reasonable rental. I rented my apart through Fair Deal, 050/2616207

The good demand is only from ppl who want to stash their cash and those who don't know how to calculate their returns on an investment. If you have to borrow money , which is the normal way of doing property business, its a loss making investment.

 

[tbashir]

There is definitely demand for IC, with Properties Dubai they were able to find two professionals wanting to rent my studio on the first day they started advertising it.

 

[Demoniise]

How much rent did u get Tbashir for your studio?

 

[Kjarkata]

Just to update, I renewed rent agreement for my 1 B/R apartment in Block IC-England for AED50K (2 cheques)-previous rent was AED58K, so I guess the situation is still not that bad.

 

[Demoniise]

Hi Kjarta,

Which agency did u use?

 

[MarianL]

Hi all,

I disagree. The area has come up a lot but it i still quite isolated from the rest of dubai. I also think ther is not much rental demand. My apt has been empty for near 2 months and i have not even had one e-mail query.

I disagree with you mk2301 - in August I looked at either renting out or selling my 1 bed flat in IC and within days I had offers for both from multiple agents who had clients waiting. Rental they were offering me 42k and selling 400k. Even now the prices look to be the same so have stabilised in the last 2 months.

i have at least 3/4 agents every week emailing me to ask if my apartment is available either for rental or to sell.

Also I agree with the rental return figure of 7% (if not slightly more) - If you buy a 1 bed for 400k and rent out for 42k with service charges of about 9k that gives you 8.25% so with a bit for maintenance (although I haven't had to spend more than 500 dirhams this year). OK, if you have to visit well that is your loss but if you live in Dubai then no tax, no visit costs etc.

 

[georgihh]

Spot on return of 7-8% in $ is the best you can get in the moment.
Dubai will be OK – not for the speculators but for all of us demanding a reasonable income.
I just came back from Dubai and I am going back in 3 months, business is as good as usual even better than before.
All the speculators are gone such a nice live – I am sorry for the people lost money, believing the speculators.
Enjoy a reasonable income from rents for the next five years – who cares if the property prices don’t go up

I disagree with you mk2301 - in August I looked at either renting out or selling my 1 bed flat in IC and within days I had offers for both from multiple agents who had clients waiting. Rental they were offering me 42k and selling 400k. Even now the prices look to be the same so have stabilised in the last 2 months.

i have at least 3/4 agents every week emailing me to ask if my apartment is available either for rental or to sell.

Also I agree with the rental return figure of 7% (if not slightly more) - If you buy a 1 bed for 400k and rent out for 42k with service charges of about 9k that gives you 8.25% so with a bit for maintenance (although I haven't had to spend more than 500 dirhams this year). OK, if you have to visit well that is your loss but if you live in Dubai then no tax, no visit costs etc.

 

[dalvir bains]

[ame=http://www.youtube.com/watch?v=sLpqZvM2kmA]YouTube - Dubai International City ( Known as China City )[/ame]