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Russian influx drives up rental prices in Dubai





The months of February and March were tense for Aretha Pretorius.


For weeks, she and her husband Chris went around Dubai desperately looking for a new house.


They have lived in their three-bedroom villa located in the centre of the city since 2019. But last year the family received an eviction notice from their landlord saying he wouldn't be renewing the lease when it ended in March because he planned to move into the house himself.


They started their hunt by checking out properties in the same community but were shocked to discover that annual house rents were 75% higher than the $34,000 (£28,000) they had been paying.


They widened their search by scouting out houses in other areas across the city but failed to find a villa within a reasonable budget.


Finally, they signed up for a house that is substantially smaller than their current place and located a long way from the city centre but will cost them $45,000 - 32% more than the rent they've been paying.


''For weeks we went around like crazy people looking for a house. Eventually, we had no choice but to compromise. Now we will have to live in a smaller house and pay more," Aretha says.


Aretha and Chris's new home will be their fifth since they moved to Dubai from South Africa in 2011. Dubai's real estate market has been through various cycles in the last decade, but Aretha says they've never before struggled to find a house like they did this time.


"Rents were quite high even 10 years ago but even then, it wasn't as difficult to find a house as it was this time," she says.


Average rents in Dubai went up by 36% last year, according to real estate agency, Betterhomes.


It's not just people looking for villas who are facing challenges. Rents have gone up across all segments including apartments. Skyrocketing rental costs are worsening a cost-of-living squeeze for the expatriates who are the backbone of the country's economy. Nearly 90% of the UAE's roughly 10 million inhabitants are foreign nationals.


The current demand in the market has priced out some renters like Waquar Ansari, forcing them to move from Dubai to the neighbouring Emirate of Sharjah, where rents are lower.


Waquar and his family were staying in a one-bedroom apartment in South Dubai paying $9,500 (£7,750) annually. When his lease was about to expire last month, the owner wanted to raise the rent by about $3,000. He initially searched for a new apartment in the same locality, but rents had gone up by more than 40%.


"I was willing to pay 10-15% more, so I checked out some other localities in Dubai as well but couldn't find any decent apartment in that price range. The only option was to move to Sharjah," he says.

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