The world has seen the rise and fall of Dubai's mighty real estate market. Dubai's prime lands before the recession were selling like hot pancakes. Now that the bubble has burst, Dubai is left with numerous finished and unfinished metal buildings and other concrete construction.
Some well-known real estate companies here in Dubai has dramatically slashed the rents to 30-60% because of the lack of demand to fill the numerous empty commercial and residential buildings. Classic example is the building where we are staying. We paid AED 73,000 per annum as rental fee for our flat in 2007. That is rough estimate of US$ 21,000 in one year! That's where our money is going month after month. Then when recession hit, our rental fee was reduced to AED 63,000. It was further reduced when we renewed our contract last year to AED 48,000. That's 35% off the original contract leasing rate we signed for.
We are expecting a further reduction this August when we renew our tenancy contract. Let's face it, the supply and demand is now tilted and the real estate boom is no longer making a loud bang.