Each year, as the summer approaches, many expatriates in Dubai leave for at least several weeks, while others decide to leave for good. And while this is a typical picture in Dubai – other, new expats with brand new employment contracts replace those who flew back home, this year the number of people who will leave and never come back, seems larger than before.
A lot of expats in Dubai are already planning their summer – some will stay, while others, especially families with little children, will leave for at least several weeks to escape the unbearable heat. And another group has already formed – those who plan to relocate as soon as the school year in Dubai ends. Some have, no doubt, personal reasons to stop calling this city a home. But many people, even those who have spent years in Dubai, are now having second thoughts as the higher cost of living is cold-bloodedly emptying their bank accounts.
The economic impact
Prices have slowly, but steadily been increasing in Dubai for a while – last year rents, which are probably the biggest expenditure for every household, jumped by up to 20 percent (more in some of the most desired communities). This was driven by the high demand, but most notably by the announcement of Dubai’s winning the bid for hosting the World Expo in 2020. Then there is the never ending increase in school fees, which only added to the already troubled family budgets and prompted many parents to ask themselves whether education in Dubai can be compared to education back in the UK, or the US, etc. Prices of everything else also went up – food products, utilities, and so on. However, the situation now is inflated with the fall of oil prices, as it has a great economic impact on many companies in Dubai. Some firms denied their employees pay rise, while other companies resorted to layoffs.
As a result, an increasing number of expats are now planning to move – not to a smaller and more affordable home, but to another country. For those, who stay, on the other hand, this isn’t such a bad thing. On the contrary, there might be a positive aspect of this Dubai expat exodus.
Looking for a new home? It may be the right timing
Families who are on a hunt for larger and better situated apartments and villas in Dubai can now take advantage of the hordes of leaving expats. Larger homes are now easily available on the market and instead at the typically high prices, they can be found with quite reasonable rents and special offers for rent-free extra months. The reason is on one hand, the eased demand in the real estate sector and in this particular segment – 3 and 4-bedroom apartments. And on the other hand, we have more and more new residential buildings and communities opening almost every month.
Another factor is also making an impact – many apartment and villa owners, who used to rent out their properties to tourists as short-term holiday homes, are now required to apply for a license. Only a few people have already registered with the Department of Tourism and Commerce Marketing, but others will simply opt for leasing their properties to tenants on long-term basis.
However, the apartments that are at present in highest demand are studios and one- and two-bedroom units, as they are the more affordable option for both single tenants and families. It means their prices are either remaining the same, or decline slightly. Rents for larger apartments are in fact, expected to decline in the coming months.
So this might be the perfect time to finally move into a larger and better home. Of course, before making such an important decision, everyone should research the market to find the best-fitting option for themselves. But the summer is also a great time for investors to buy a larger property as growth in sales prices is also cooling down.