Surging rentals have brought a new lease of life to the 'rent-to-own' property market, reigniting interest in this concept.
As rental prices continue to climb in most areas, some communities are experiencing stabilization after a three-year surge, driven by high demand from a growing population, which reached 3.696 million on May 25.
Rent-to-own programs are particularly popular and advantageous in high-priced areas of Dubai, enabling individuals to easily achieve homeownership and save on rental expenses.
Recently, the Real Estate Regulatory Authority (Rera) adjusted its rental calculator in early March, leading many tenants to explore strategies for managing housing expenses and establishing long-term financial stability. One such strategy involves pursuing homeownership through rent-to-own programs. This not only allows renters to accumulate equity but also potentially stabilizes their monthly expenditures, instilling confidence in landlords regarding the financial security of their investment.
Data from property management firms in Dubai indicates a surge in rent-to-own agreements in 2024, especially in upscale neighborhoods such as Downtown and Dubai Marina, as well as in mid-range areas like Jumeirah Lake Towers (JLT) and Jumeirah Village Circle (JVC).
According to Sachin Kumar Singh, business head and managing partner at Foremen Fiefdom, transitioning to ownership through a 'rent-to-own' plan enables tenants to lock in the current market price, avoiding potential significant rent hikes in the future. This fosters stability and financial predictability, particularly appealing to those with long-term homeownership goals.
This trend is viewed as a balancing act by both landlords and tenants, facilitating mutual benefits that leave both parties satisfied. The 'rent-to-own' option is gaining momentum, offering a pathway to eventual ownership for qualified renters.
