Dubai rents too high? These tenants have it worse

Dubai is still among the world’s costliest places to rent a flat, but tenants in other cities have it worse, a new report reveals.

Renting a two-bedroom apartment in the emirate costs an average of $1,787 (Dh6,563) a month, which may be costly for breadwinners with single-digit salaries. But there may be some comfort for Dubai’s tenants in knowing that it’s even worse in other cities.

According to Deutche Bank’s latest Mapping the World’s Pricesreport, rents in Dubai are 14th highest among 50 major cities around the world this year, but they’re cheaper than in commercial centres in Hong Kong, United States, France, Australia, Switzerland and Singapore, among many others.

Rents eat up a huge chunk of household budgets and in 2017 alone, people’s spending on accommodation in the UAE was estimated to be around Dh300 billion, big enough to construct 12 mega shopping malls.

In Hong Kong, the world’s most expensive city for tenants, expenditures are even bigger. A month’s rent for a two-bedroom flat in the Asian city will set you back about $3,737 (Dh13,726), which is more than double the average cost in Dubai.

In San Francisco, Paris and London, you’ll also have to shell out more than you would in Dubai, with monthly rents for the same sized flat costing approximately $3,664, $2,483 and $2,410, respectively.

On the flip side, rents in New Delhi and Bangalore, India are the cheapest, at $346 and $289, respectively.

Disposable income

And if you think that people in Dubai are worse off in terms of their ability to save money due to high living costs, think again. In Deutsche Bank’s study, analysts also looked at how much households are able to set aside after paying the rent and Dubai showed up high on the list.

A working couple in Dubai has an average disposable income of $2,554 (Dh9,380) a month, much higher than in cities that are hugely popular among expatriates, such those in Australia, United Kingdom, Canada, Singapore and Hong Kong.

15 most expensive cities for tenants

(Monthly rent for mid-range 2-bedroom flat)

1. Hong Kong: $3,737
2. San Francisco: $3,664
3. New York: $2,854
4. Paris:$2,483
5. London: $2,410
6. Zurich: $2,337
7. Boston: $2,164
8. Sydney: $2,052
9. Dublin: $2,048
10. Singapore: $1,974
11.Oslo: $1,949
12. Amsterdam: $1,876
13. Copenhagen: $1,848
14. Dubai: $1,787
15. Tokyo: $1,740

15 cheapest cities for tenants

1.Bangalore: $289
2. New Delhi: $346
3. Kuala Lumpur: $479
4. Istanbul: $498
5. Manila: $541
6. Jakarta: $562
7. Mumbai: $612
8. Athens: $613
9. Sao Paulo: $728
10. Mexico City: $761
11. Rio de Janeiro: $771
12. Prague: $875
13. Johannesburg: $878
14. Warsaw: $887
15. Cape Town: $939

Rents in Dubai have been declining and in the first quarter of the year alone, apartment rental prices registered an annual drop of 7.3 per cent, according to Reidin. Villa rates dropped by 10.15 per cent.

According to analysts, rents are expected to continue to come under pressure this year, as more properties are set for delivery before the end of 2018.

Disposable income after rents (assuming two people are working, sharing expenses)
 

1.Zurich: $4,595
2. San Francisco: $3,142
3. Chicago: $2,940
4. Sydney: $2,887
5. Frankfurt: $2,736
6. Oslo: 2,689
7.New York City: 2,688
8.Boston: $2,658
9. Dubai: $2,554
10. Copenhagen: $2,538
11.Melbourne:$2,507
12.Stockholm: $2,223
13.London: $2,176
14. Wellington: $2,144
15.Tokyo: $2,134

Editor's Note: This article was originally published in Gulf News on Wednesday May 30th, 2018 http://bit.ly/GNDubaiTenants