Dubai: When house prices and rents were soaring in recent years, there were speculations that Dubai’s expatriate bubble was about to burst. There were claims that many people were preparing to pack their things and leave due to high living costs.
However, with the continued slowdown in the realty sector, staying in the UAE for the long haul is now becoming an enticing option for many expatriates in the country – at least according to a new research.
In a survey conducted among 1,500 respondents in the UAE during the first quarter of the year, more than half (74 per cent) said they are considering buying property in the country. In last year's survey, 54 per cent said they wouldn't even consider acquring a flat or a villa in the UAE because they were not certain how long they were going to stay.
According to Compareit4me.com, a financial comparison website which did the studies, said this only shows that more and more expatriates are looking to “lay down their roots” and commit to life in the country.
Analysts attribute the change of heart to the slowdown in the UAE’s realty sector. With house prices dropping, those who have some extra money are more inclined to invest. Lower rents also mean that tenants will be less tempted to move out of the country.
“The recent drop in housing prices has obviously removed a big weight from people’s minds and made settling here a more viable option,” said Jon Richards, CEO at compareit4me.com.
Last year, there were reports that more than half of expatriates in the UAE were considering packing their bags and leaving the country for good due to rising living costs.
“We are happy to announce that the number of people who are interested in buying property is on the rise. It seems attitudes are changing and fears and insecurities about the future are lifting,” said Richards.
Expatriates who spoke to Gulf News, however, tend to disagree with the findings. Anurat (name changed), who has been in Dubai for more than five years, said he is planning to move out of the country to seek better opportunities.
"Living costs in Dubai are still increasing. I live in a room shared with other expats and our rent has gone up from Dh3,500 a couple of years ago to Dh5,000 this year. I think I will give myself another two years and after that, I will leave," he said.
"Also, there's no point in staying here for a longer period because you cannot earn a citizenship. I would rather stay in a country that offers citizenship to expats," he added.
Dubai hasn’t been figuring prominently in a number of cost of living surveys. In the latest Cost of Living Index by the Economist, the emirate emerged only as the 68th most expensive city in the world, while Abu Dhabi came 56th, far behind developed cities like Singapore, Zurich, London and New York.
The average cost of renting apartments and villas in Dubai continued to drop in the last 12 months and is expected to fall further this year. Analysts fear that the slowdown in the job market could impact tenancy demand.
Cluttons forecast that overall rents in Dubai will drop 3 per cent to 5 per cent this year, on average, while other realty experts like Phidar Advisory are expecting lease rates to drop by at least 10 per cent.
Lukman Hajje, COO of propertyfinder Group, suggested that there’s a growing investor interest at the moment, thanks to declining property values.
“Many property seekers have been sitting on the sidelines watching prices ease for the past 18-24 months trying to time the bottom of the market which I suspect we'll see during 2016,” said Hajje.
“But interest continues to be strong particularly from long-term investors seeking excellent high single digital rental yields and end users who have seen their dream home come to within reach. Moreover, the oil's rebound in the past two months from a 14-year low of US $27 per barrel to the verge of $50 per barrel early this week has given reason for optimism.’’
Richards said the slowdown in the realty sector is undoubtedly changing many people’s long-term plans.
“There is no doubt that the stabilisation in the property market, which is thought to be a knock-on effect of low crude oil prices and the subsequent strength of the US dollar, must be having an impact on people’s long term plans,” he said.
“Additionally, with the recent exciting developments - both commercially, in terms of business opportunities, and physically, with projects like the impressive Dubai Canal - staying and committing to life in the UAE is becoming even more of an enticing option.”
