property

Why Dubai residents choose to live in the outskirts

Residents are now willing to endure a longer commute for the sake of affordability

By Kiran Thakur
00:00 May 24, 2017

Dubai now has several self-sufficient communities where individuals can comfortably live, work and play. Not so long ago areas such as Business Bay, Jumeirah Lakes Towers and Dubai Motor City were considered secondary living options. Now these communities are home to numerous amenities as well as trendy food and beverage outlets, thereby enhancing residents’ lifestyles and becoming increasingly popular choices.

The improvement of infrastructure within the emirate also means that residents are able and willing to withstand a longer commute for the sake of affordability and getting more for their money in terms of apartment size, quality, and in some cases both. This applies for both first-time tenants in Dubai as well as a vast number of existing renters assessing their options at the end of a lease and asking the inevitable question: “Should I stay, or should I go?”

Within the newer areas of Dubai, locations such as Downtown Dubai, Dubai International Financial Centre (DIFC), Dubai Marina and Jumeirah Beach Residence are still typically considered to be among the prime locations for apartment-style living. These communities benefit from some of the better-quality building options, a generous retail offering and enough entertainment choices to keep residents close to home during their leisure time. On the other hand, these vibrant areas come with a couple of drawbacks, including steep rents and heavy congestion during peak hours. Average rents for a one-bedroom apartment in Downtown and Dubai Marina currently stand at Dh105,000 and Dh90,000 per year respectively.

Emerging areas

Travel about 20km or so to quieter and emerging areas such as Dubai Sports City, Jumeirah Village Circle or Al Furjan and you can find yourself a significantly larger two-bedroom apartment for similar prices to those previously mentioned. These areas may currently not have the same array of amenities, however, they do have sufficient provisions and cater to those seeking affordable community living.

It is evident that the secondary locations are gradually progressing over time with the improvement of the road networks in the emirate and establishment of local retail centres such as City Centre Me’aisem and the newer My City Centre Al Barsha. We have additionally seen a number of health care and educational facilities open up in and around these locations, further benefiting the local inhabitants.

A number of infrastructure improvements are also under way such as the Dubai Metro extension, which is scheduled to operate from May 2020. Al Furjan is one of the key areas expected to benefit from the extension of the Metro, along with Discovery Gardens, Jumeirah Golf Estates and Dubai Investments Park.

As these communities continue to develop and establish themselves, they will attract an increasing number of residents, and in turn spread the population away from what are commonly considered prime residential locations.

All for tenants

The residential market dynamics in Dubai are currently in the tenant’s favour with average Dubai apartment rents having declined by three per cent throughout the past year, primarily driven by compression of rents for larger apartment units. With multiple options available, occupiers have the ability to exercise their negotiation skills with landlords regarding rent and payment terms. Where there are higher levels of vacancy, landlords continue to face strong competition from available units and some even have to offer incentives to attract and retain tenants. Such incentives can be in the form of multiple cheque payments or rent-free periods.

The estimated supply of residential units by 2019 currently stands at 70,000, which will keep deliveries well above the annual average and is likely to maintain the pressure on landlords over the next couple of years.

Dubai has experienced a visible pace of change to date and about 80 per cent increase in population in the last 10 years. With a number of significant master plan developments in the pipeline, namely Dubailand, Dubai Creek Harbour and Mohammad Bin Rashid City, the options available to the future residents of the emirate will only continue to grow.