Dubai & Sharjah: When business analyst Sumeet Asthana 46, relocated to Al Nahda in Sharjah from Karama three years ago, many in his office didn't think much of the move. "Everybody in my office had this existential question - why? And I used to say, why not?" recalls Asthana.
Circa 2010. Six of Asthana's colleagues have moved to Al Nahda in the past one year, including his boss, who moved there last week.
"He lived in Bur Dubai and thought Al Nahda was like some hick town for lesser mortals.
"The change of heart happened in March when he came over for my daughter's birthday with his family and saw that not only were we living in a bigger, better apartment than his, we were also enjoying a slew of all-inclusive amenities such as swimming pool, sauna, play area and free covered parking for almost half his rent," said Asthana.
Like Asthana, attracted by the prospect of good living at lower rents, thousands of people have stormed the two Al Nahdas - one each on the Dubai (Qusais) and Sharjah sides - in recent months, transforming the hitherto sleepy neighbourhood into a hyper-kinetic, self-contained township that has grown pretty much on its own.
Where once stood industrial sheds, today a chrome forest of residential skyscrapers has taken over. Over 400 buildings with approximately 40,000 units have come up in the two Nahdas in recent years, reckons Himesh, manager of Bin Kamel Real Estate. In contrast the International City clusters have around 24,000 residential units in 413 buildings.
Despite the real estate crash, many more are still coming. The four-tower 45-storey Tiger Buildings on the Sharjah side, due to be ready soon, for instance, could accommodate the entire population of Satwa's Jaffliya locality and still be left with space for some more.
Yet for all this, there is a method to the madness.
Money changers, pharmacies, gourmet eateries, hotel apartments, shops, a huge community pond park around which people take leisurely walks at night have sprung up in quick time to cater to the wave of residents.
Fixing a car or attending to a health issue can be done within the same square kilometre in this new community that lies midway between Mamzar Beach in the west and the industrial area to the east.
Hotel apartments and travel agents have popped up alongside retailers such as Al Maya Lal's Supermarket, Spinneys, Carrefour Express and Lulu.
"There was a tremendous growth here, and the area is still growing despite the market crash," said Himesh.
Abdul Wahid of Bin Ghadayer Real Estate, said the rent slide has precipitated "musical chairs" with people moving to cheaper or bigger units. Three months ago, Ryan S., a 31-year-old logistics executive at Dubai Industrial Park wife moved into a Dh23,000-a-year studio at Tiger building - thrice the size of the room they had in Deira. In the process they saved Dh7,000 in rents. "Here we enjoy more privacy, too," said Ryan, whose wife gave birth to a son recently.
Ali Mohammad, a 32-year-old Pakistani who has lived and worked in Dubai for 13 years, said current rental deals offer relief. "When you live in a bigger space, you feel less cramped and stressed," said Mohammad, who moved to a one-bedroom flat with a big hall in Al Nahda, Sharjah in February for Dh31,000.
Some residents, however do realise the rental market is cyclical and the good times may not last forever. "What goes up must come down - and vice versa," said Aparna, an Indian financial controller for a public relations agency who moved to a one-bedroom flat in Al Nahda, Sharjah six months ago. "We're just enjoying a ‘down' market while we can," she said, having moved from her one-bedroom apartment in Al Nahda, Qusais, where she was paying annual rent of Dh60,000. Aparna is now looking to upgrade to a two-bedroom unit from her current unit within the same building for the same rent (Dh45,000).
Within Al Nahda-Qusais itself, things are in a state of flux.
It's rare to find people not moving or thinking of moving to a newer, cheaper place ever so often. Hussain, an Iranian salesman, says he's saved Dh30,000 by moving out of a two-bedroom apartment in Al Nahda-Qusais, where he used to pay rent of Dh70,000 a year, to a one-bedroom flat in a building just a stone's throw away.
"I'm not expecting a salary increase this year," said Ali, 37, who works at the free zone. "This [moving out] is my best hope of saving - or making - money."
Proximity to her place of work is the reason Dr Monika Kaushal, a paediatrician at Zulekha Hospital, chose to live here. "I have to stay close to the hospital because the nature of my job is such that we're on call 24/7."
Hari, a veteran salesman at Rocky Real Estate, which manages over 300 buildings in the UAE, said Al Nahda offers the best of both worlds. "The rents are still sliding… it's good news for tenants," he said.
When the economy roars back to life and the Metro's Green Line opens next year, it will change the two Al Nahdas - and perhaps the now relaxed lifestyle - forever.
On April 13, a Reuters poll showed Dubai house prices and rents are set to fall 10 per cent more in 2010 and not recover until 2012, as the resumption of some projects and completion of others weigh on an already-oversupplied market
Residential property prices have fallen 53 per cent so far from their peak in 2008 due to the global downturn, said Reuters, quoting the median estimate of 17 analysts at banks, investment firms and research institutions
On May 9, a new Colliers Int'l report showed that Dubai real estate prices are now on a par with 2007 levels
Al Nahda-Sharjah1 br flat (31k to 33k); 2 br flat (38k to 45k) - gym and parking extra 3k
Al Nahda-Dubai 1 br flat(38k to 42k), 2 br flat (45k to 55k) with free parking & gym
Experts speak: Rents seen down
Dubai and Sharjah will continue enjoying a “softening” of rents through 2011, a property industry official told XPRESS.
Landmark Properties chief executive Charles Neil said: “We see rents still on a downward trend – due in huge part to a massive release of up to 90,000 units from 2009 through to 2011 in Dubai alone.”
Since November 2008, Dubai rents have dropped more than 50 per cent while office space is expected to more than double from 30 million sq ft in 2008 to 70 million sq ft in 2011.
“The upside to this market correction is that people who used to spend 50 per cent of their income on shared houses or small apartments have started living on their own or moved to a bigger space,” he said.
Property sales have now seen a smaller correction, said Neil, whose company reported a 17 per cent average drop in villa prices and two per cent fall in apartment prices in the first quarter of 2010 – in contrast to Colliers’ House Price Index, which reported a two per cent increase in the price of residential units.
Landmark has seen a “four- to five-fold” jump in volumes as rents began to drop, said Neil. “There were a lot of relocations last year… and they are still happening,” said Neil.
Meanwhile, according to a Bloomberg report, Bank of America Merrill Lynch has predicted Dubai will have 44,000 vacant units in 2010. It also expects average residential rents to fall by 15 per cent in 2010.