Survey Reveals The Demise Of One Cheque Rent Payments In DubaiWednesday, June 06, 2012
According to the results of a recent survey of brokers operating in Dubai real estate, one cheque rent payments in Dubai have become rare. The survey was conducted on a sample of 3000 brokers and the analysis of their responses has revealed the demise of one cheque payment system.
Since the Dubai real estate market is under oversupply pressure, landlords are allowing flexible rents payments as a part of their incentives. Because of these incentives, the previous strict one cheque payment requirement no longer exists. Landlords are now offering deals with 2, 4 or and even 6 cheque.
More than half of the responses of the brokers surveyed believed that 4 rents payments are a benchmark for the tenants while only 6% believed that one cheque payment mechanism is still in use. When the Dubai real estate market was enjoying boom, brokers used to demand large amounts from the expats living in Dubai who had to seek bank loans to make payments.
Since 2009, as the rents have fallen by more than 60% across Dubai, brokers have become quite flexible. The new survey shows that followed by 3 cheque deals, 2 cheque deals are second in popularity. Sources say that oversupply in the market has shifted the attitude of the landlords as they are now being flexible with the renters. Some agents have also highlighted that the general market is flexible but one cheque deals will prevail in the end.
David McCormack, group operations director at Olive Property Group, says that they mostly deal with big multinational companies and they are happy to pay rents in one cheque. This is because tenants agree to pay rents in one cheque. Managing partner at Arabia Escapes, Michael Burke, says that over the couple of years landlords are now more educated and mature. Now the point of concern is not the number of cheques but the type of person writing these cheques.