Dubai: Anyone planning to book a holiday home in Dubai during the second half of December needs to act quickly. The short-stay or holiday home rentals have experienced almost overnight gains and could reach record levels ahead of New Year’s Eve.
“Everyone in the world seems to have decided they will spend New Year in Dubai,” said an owner of multiple luxury properties available for shorty-stays. “At least, even with the steep rates being asked, property owners and management companies are getting instant bookings.”
There is already a build-up in demand and rates. Previously listed apartments for Dh150 a night are now listed for Dh800. “I have a studio at DIFC that’s now at Dh615 a night – and for the New Year it’s Dh1,822.”
Near the end of the year, short-stay rentals on the Palm could surpass Dh2,500. For properties with a sea view or in close proximity to New Year’s Eve attractions, some industry experts believe rates may reach record levels. Holiday homes in Dubai are back to making money and quite a lot of it.
Message for investors
This is an ideal opportunity for investors to expand their Dubai portfolios and take advantage of the returns provided by short-term rentals, according to Mark Castley of LuxuryProperty.com. “Right now, holidaymakers and tourists are drawn to short-term rental contracts, as a furnished home gives them complete privacy, extra space, easy access to transportation links, and a thriving community where they can interact with others,” he said. “This makes an attractive proposition for homeowners who can receive a stable source of income without any hassle.”
Boom phase
Sources within the airline industry confirm that December will be an “exceptionally busy” month this year, with Expo-generated demand adding another layer to the tourist arrivals. Castley says the current surge is much bigger.
Sure, “Demand has primarily been fuelled by tourists and visitors coming for Expo 2020, but also by expats who want a chance to immerse themselves in the city before making a longer commitment,” he said. “Communities located a short distance away from Expo such as Jumeirah Golf Estates, Mudon and Town Square are quite highly sought after and very much of the moment.
“However, there are also the ‘evergreen’ communities of Dubai, the ones that are always in demand no matter what the occasion – Palm Jumeirah, Dubai Marina and Jumeirah Beach Residence. Demand in these areas is particularly high over the winter season, and especially close to New Year’s.”
Landlords will be convinced
In general, all of this sounds much better than the uncertainty that plagued the holiday home market last year, except for the short period in December. Due to the pandemic’s impact on property owners, they did consider exiting the short-stay rental space and opting for the security of long-term rentals instead. By the time the Expo began on October 1, all doubts had been cleared.
There were already a lot of booking inquiries even before the opening day. Anna Skigin, CEO of Frank Porter, provides an update: “Areas surrounding the Expo site were becoming more popular, even though we were seeing a lot more properties come in the surrounding areas such as Dubai South. These new ones are already showing good occupancy.
“The occupancy were very high over May and June last, at above 87 percent. July and August turned out to be lower – at 65-75 percent – due to many closed borders. But all that changed from September/October – all in line with positive news (on vaccines) coming from everywhere.” (The September spike also had to do with multiple exhibitions and conferences making a return, to set up a busy schedule ahead of the Expo opening.)
Benefiting all
Property that offers a clear view, like a sea view or a view of New Year’s Eve fireworks, will command a premium over those that are barren. Unfortunately, this year’s market seems to be different.
“I have a unit next to a tower project – there’s no view apart from the construction,” said a property owner. “Yet, my unit has managed to pick up some crazy booking rates for December..”
Everyone seems to be planning to go to Dubai in December.