Vacancy Rate

Vacancy rate is the percentage of rentable space or time that remains unoccupied, directly reducing effective income and impacting property valuation.

CalculationFormula
Physical vacancy(Vacant units / Total units) times 100
Economic vacancy((Potential rent minus Actual rent) / Potential rent) times 100
Annual vacancyAccount for turnover between tenants
Market vacancyAverage across comparable properties
Dubai Vacancy AssumptionsConservative Underwriting
Prime long-term residential5% to 8% annual
Secondary residential8% to 12% annual
Suburban villas10% to 15% annual
Short-term rentals30% to 50% annual average
Commercial offices10% to 20% depending on location

Related Terms

Occupancy RateEffective Gross Income (EGI)Turnover (Tenant)Market Analysis

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