Property | UAE

The dynamics set to change in Dubai and Abu Dhabi realty markets

Will set off major population shifts

  • By Robin Teh Special to Gulf News
  • Published: 12:19 October 11, 2012
  • Gulf News

New residency regulations have been drafted to regulate the property market in the UAE. The first requires expatriates seeking to renew their residence visa or issue a new one for their relatives to provide an attested tenancy contract along with a power bill in.

This, according to the Ministry of Interior, is intended to build a reliable housing database for the expatriate population.

The law is now applicable to bachelors as well those who were earlier “temporarily exempted”. This regulation has a direct impact on expatriates living in apartments or villas on a sharing basis.

To sponsor a visit or get a residence visa, they will now have to move into separate premises. It can be estimated that the full impact of the regulation on the property market will be felt gradually over a period of 24 months (assuming proper enforcement), since a residence visa has to be renewed after a period of every two years. This might lead to redistribution of the populace in Dubai and Abu Dhabi.

A typical family sharing an accommodation pays around Dh1,500–Dh2,500 a month as rent. In Dubai, families sharing units in Karama, Diera, Bur Dubai, Satwa, Ghusais, Jafiliya, Rashidiya area will have to move to communities like Discovery Gardens, Sky Courts, International City, Dubai Silicon Oasis and northern emirates. The relocation would increase demand for studios and one-bed apartments in the range of Dh18,000-Dh30,000 per annum.

Families in Abu Dhabi have limited options in their city and would have to move to areas in Dubai or the northern emirates. The choices will be further limited for residents affected by Abu Dhabi government staff residence rule. Although, a grace period of one-year has been granted to implement the decision, the regulation will force families to move out of areas such as Discovery Gardens, JLT and Dubai Marina (which are the first choice for residents working in Abu Dhabi).

It is estimated that 20,000 residents commute daily between Dubai and Abu Dhabi for work, which could bring in an additional 50,000 as staff and family members to live in Abu Dhabi by next year, which could put an extra pressure on civic amenities in the city. However, the authorities remain confident of handling the influx.

According to the city council, healthcare infrastructure in the city already corresponds to the levels in the US and the UK, at 2.9 beds for every 1,000 patients.

There are an additional 15 hospitals under construction which will increase the rate of the beds to 4.7 per 1,000 patients by 2014. To meet the education requirements of families, a total of new 34 schools will be functioning in the next academic year. Moreover, 12 new schools are awaiting opening after having met all conditions, and five more applications are under study.

This is expected to provide 65,000 study seats in the academic year 2013-2014. Civic amenities are also regularly upgraded to handle extra residents.

This will positively impact occupancy rates in the residential areas although any increase in leasing rates remains unforeseen, as rates in the capital city are already at the higher end.

Overall, the residency regulations will result in relocation of populace to different areas across Dubai and Abu Dhabi thus providing an impetus to residential leasing market.


— The writer is the head of valuations and research at Chesterton International.

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