(MENAFN - Khaleej Times) Dubai is fast becoming one of the world?s most iconic citie
Take two of the world’s most iconic cities: london and dubai. despite a vast age difference between the two in terms of establishment the similarities are uncanny.
Historians suggest london was most likely a rural area with scattered settlement before the onset of its expansion nearly 2000 years ago. fast forward to 2014 and it is noted as one of the most significant financial and cultural capitals of the world.
Now the uae — dubai in particular — is slowly journeying down the same path.
The once small fishing and pearl diving town struck gold — or oil — in 1966 which changed the city beyond recognition. now a vibrant modern business-centred city-state dubai’s tax-free safe living environment is desired by many but is it pricing itself out of the market in terms of the cost of living
Affordability is a hot topic
Over the last year alone inflation has been the talking point for many. whether on groceries or properties prices are rising as expansion increases. but as dubai continues to establish its broad economy including being home to an internationally-recognised financial centre senior client manager at espace real estate john lyons says prices are still reasonable.
“it’s obviously the most strategic city in this region. if prices have gone up it is probably because they were artificially low in previous years” he tells khaleej times.
Noting that property prices are still relatively low when compared to cities including singapore hong kong and shanghai to name a few lyons says many people come to dubai because of the attractive earnings potential and high standard of living.
“the career opportunities are a big draw for expatriates here and because of the tax-free earnings a person’s disposable income is higher. where else in world can you expect to live in a city so close to the beach and the world’s most recognisable landmarks for this much money”
Lyons says that in the short term confidence and sentiment will drive the property market more than the fundamentals. however over the long-term it will be the market fundamentals that will have the most significant impact on the property market. he also comments that although price increases may result in reduced demand steps are being taken to control market inflation.
“i think there is still good value in the market and it helps that this inflationary environment is being closely monitored by the central bank. the rent cap rules imposed by the real estate regulatory agency (rera) are also an example of the authorities trying to protect tenant interests which ultimately improves social stability and prevents rent inflation from damaging the wider economy” he says which proves that the welfare of the resident is not being compromised for monetary gains.
Although many are questioning whether out-priced properties are a risk for the wider economy lyons says dubai has recognised this concern and is taking steps to prevent the market from becoming unstainable for its residents.
Forced to compromise on lifestyle
After years of expansion of its centralised city greater london was established in 1965 comprising the city of london and 32 london boroughs. similarly as you look around dubai its wider areas are undergoing heavy expansion works to keep up with the city’s population increase.
From dubai sports city to remraan dubailand is now noted as one of the city’s “up and coming” locations. its uncentralised location makes property more affordable than most in the inner city areas but the downside is apparent. with heavy drilling and construction on new apartment blocks and roadworks ongoing many residents have flagged concerns about noise pollution but are forced to sacrifice their living ideals for affordability.
Thirty-four-year-old said ziad says this is a story that will never end in dubai. “i moved to a villa in the springs because it’s a quieter area and i can relax here. i wake up hearing the birds sing which is a vast change from where i was living before.”
Previously a resident of jumeirah beach residence ziad moved from the area because of the ongoing construction works. “i couldn’t take it anymore. the noise the traffic the construction ... it was too much. it wasn’t cheap either but i chose to pay more to live somewhere quieter and more established” he tells khaleej times.
Describing dubai as a fast-paced city he says where you choose to set up home is vital to get a good start and end to your busy day but not everyone can afford to live where they want. “prices are rising and for singletons it is difficult to afford a decent solo living place that is why they are being forced to move out to these less established areas.”
Sports city resident 28-year-old elizabeth shah is one resident who has had to sacrifice inner city living because of the high price tags. and the noise pollution is not easy to live with she says. “i used to live on the palm but my rent shot up by about dh40000 in may which forced me to end my contractual agreement. i like sports city as it is an up and coming area and there is a good community here but the construction is a constant headache.”
A vast change from her last living location shah’s apartment is situated next to a building site where drilling begins early morning and goes on all the way into the evening. “if i had a young family i don’t know what i would do. luckily i am young and single so i just have to grin and bear it but to have a family here would be a nightmare” she says.
If she could move to a more established community she would but her “budget won’t allow” for it she says.
As the economy continues to grow in dubai lyons expects prices to soften and balance out in the near future but he believes there is no right or wrong answer when it comes to buying or renting property in dubai as it all depends on circumstance.
“there is always a risk of owning a property anywhere in the world but there is also a risk of not buying too as inflation will have an impact on the lifestyle of those who rent.”
So although living in dubai is still affordable in his eyes lyons admits prices have increased of late and says if you are here for the long-term and can afford to buy investment could be the better option as inflation will always affect the tenant more than the buyer.