DUBAI'S SHORT-STAY RENT DEMAND FEELS SUMMER HEAT

A flood of new properties have been added to Dubai's short-stay rental market since the start of the year, bringing down rents on these daily/weekly leases.

- BY MANOJ NAIR BUSINESS EDITOR

For the owners of these properties, it means they are looking at lower returns than the market has been used to in the last 3 years. New supply of homes in the rental market was always going to cool off asking rates but rather than in the 1-year rentals, these supplies are having an effect on the short-stay rates, say industry sources.

Along with the onset of lower demand and lower rates during summer, it makes for a tighter market and there are some adjustments these landlords need to make.

"Most of the supply increase is driven by individual owners and smaller operators sometimes with just a handful of properties along with a wave of new micro-management companies," said Vinayak Mahtani, CEO of bnbme, a holiday home consultancy.

"The short-stay industry often appears glamorous from the outside, but many newcomers underestimate the challenges.

While occupancy rates have held steady, it's the average daily rates (ADR) that have felt the pressure.

"The influx of operators without a hospitality background has made pricing more erratic the reflex to cut rates doesn't benefit anyone in the long run."