While Dubai continues to pump out sumptuous new apartment blocks for a rising number of expatriates the city no longer offers the luxury lifestyle that lured many foreigners to the Gulf.

A shortage of affordable homes and a reduction in overseas allowances since the financial crisis are pushing foreign staff on middle incomes out to less-glamorous areas of the city far from the office or to neighbouring Sharjah.

Investment bankers lawyers and top managers at multinationals may enjoy seven-figure salaries but other expats - from architects accountants and IT managers to legal secretaries and HR executives - are often on household incomes of Dh10000-Dh30000 a month says property consultants JLL.

They can afford annual rents of Dh72000 says JLL or could buy a property for around Dh790000 - a fraction of prices in expatriate neighbourhoods Dubai Marina and Dubai Downtown for example where two-bedroom apartments sell for up to Dh4 million.

"There's a squeeze on middle-income earners" said Faisal Durrani head of research at property consultancy Cluttons. "Affordability issues are likely to become more acute."

Dubai's property prices and rents have steadied in the past year but are still 50 per cent higher than two years ago according to estate agent Cluttons and are expected to be on the rise again by 2017 as Dubai prepares to host the Expo 2020.

The only districts offering affordable accommodation for many middle-income earners are areas near Dubai's creek and parts of the city's outskirts such as International City and Dubai Outsource Zone.

But as expats move out of more central areas previously cheaper suburbs have experienced the biggest rental increases.

Randy a Filipino fitness instructor and his British wife Layla moved to Remraam - one such area about 50km from Dubai's business district - in May 2013.

"We used to live in Business Bay which was only a 10-minute drive from most of my clients" said Randy 37. "We rented a one-bedroom apartment but it got so expensive we moved here - it was the only nice place we found where we could afford a two-bedroom place. We're now 30 minutes' drive from anything."

The couple who have a 13-month-old son Andre initially paid Dh55000 in annual rent but this has risen to Dh63000 limited by rent caps. But caps only apply if a tenant renews a lease and two-bedroom apartments in Remraam now advertise for Dh80000-Dh100000 a year.

Land is traded like a commodity in Dubai inflating prices. This has pushed developers to focus on high-margin luxury projects - middle-range apartment blocks are difficult to make a profit on without subsidised land. This year developers have launched new projects totalling 19500 homes of which JLL estimates only 22 per cent would meet its definition of affordable for the middle-income bracket.

About 70000 new homes in total are due to be completed in Dubai by the end of 2018 more than double the number in 2013-14 but below a 2007-08 peak of 90000 CBRE estimates.

"These units are not being completed at such a quick rate so we see a major negative impact on the rental market" said Mat Green research head at CBRE Middle East.

Many employers in the emirate have done away with housing allowances and slashed overall remuneration in the wake of the 2007-08 financial crisis but may have to reevaluate those packages if they want to retain the same calibre of talent.

"The need for affordable housing will become more pronounced" said Dana Salbak JLL research manager. "Employers will have to increase wages or housing allowances to attract and retain staff."

Some residents have moved to neighbour Sharjah. Property prices are less than half those in Dubai Cluttons estimates and late last year Sharjah allowed foreign UAE residents to buy property in some developments. - Reuters

However it is more than an hour's drive away in rush hour from Dubai and lacks the dining shopping and other activities that its neighbour offers.

CBRE's Green says Dubai should prioritise build-to-lease projects whereby the emirate's developers the largest of which are state-owned retain ownership and lease units out to tenants to keep rents at affordable rates.

"But developers are commercial entities with responsibilities to their shareholders to deliver profit and dividends" he said and thus so far have not favoured such schemes.

Owning a home has become further out of reach for long-term expats like Randy since the UAE aiming to deter speculative buyers has raised the minimum mortgage deposit to 25 per cent over the past two years. Dubai has also doubled property sales transaction fees to four per cent.

"If I want to buy a Dh1 million property I need to find about Dh300000 up front" said Randy. "Where am I going to get that?"