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The cost of housing has always been a cause for worry for low-income expatriates in the UAE. When rents in Dubai became unaffordable, a number of residents packed up their belongings and traded long commutes for cheaper apartments in Sharjah.
The latest Northern Emirates market report from property consultants Asteco revealed that a new rental hotspot in the UAE has emerged. This time, budget-conscious residents are shifting as far afield as Ajman, a two-hour long commute from Dubai, in search of wallet-friendly accommodation.
Asteco's report noted that Ajman's residential real estate sector registered a 7 per cent growth in the second quarter of 2014. Two-bedroom apartments in Ajman cost Dh30,000 to Dh45,000 to rent per year, compared to Dh80,000 in Sharjah.
Tenants looking for prime accommodation further north in Ras Al Khaimah can expect to pay up to Dh75,000 for a high-end two-bedroom unit in a master-planned community.
''Ajman is now taking over the mantle as the relocation destination for budget-conscious residents as landlords in Sharjah ask higher than average rental rates, particularly for brand-new buildings in popular locations like Al Nahda, Corniche and Al Wahda,'' said John Stevens, managing director of Asteco.
''Sharjah in particular has benefited in recent months due to aggressive rental rate increases in neighbouring Dubai, but this quarter saw a degree of stabilization in Dubai's more affordable communities, which led to a reduction in the number of residents choosing to relocate.''
However, not every budget renter is tempted to move to Ajman. Elise Roilan, an expatriate who is renting a room in Sharjah but working in Dubai, said it's not practical to move to Ajman because her office is based near Media City.
''Ajman is just too far away from my workplace. If I was working near Al Nahda or Al Qusais, or if I had a car, I would consider renting in Ajman. Right now, I spend an hour and a half commuting to Dubai every morning and that's already difficult for me.''
Melwyn Abrahan, another expatriate based in Dubai, said he would not trade the amenities in Dubai for a cheaper rent in a far-flung town. ''When I consider relocating, the primary thought on my mind is what I am likely to gain against or what I am likely to lose. Since all of my activities, work and friends are in Dubai, a move to Ajman for a lower cost solely would not be probable given the amenities available here in Dubai and the travel time it would take on a daily basis.''
Christine Lacson, who works in Dubai, said Ajman is not an ideal place for her and her family, especially since her daughter goes to school in Rashidiya. ''It's far and it will take much of our time traveling.''
Namita Thakkar said staying close to her relatives and friends in Dubai is also a priority. ''All our relatives and friends stay close by, so we will definitely not consider moving to Ajman. It's better to stay in Dubai rather than to spend on traveling every day and staying alone in the outskirts without friends and relatives,'' she said.
''Dubai is more happening and lively. I would rather move into a smaller apartment in Dubai than moving to Ajman.''
Despite overall stabilisation, rental prices in certain Sharjah neighbourhoods recorded above-average growth in the second quarter, led by a 7 per cent rise in Al Khan where a one and two-bedroom unit currently command up to Dh45,000 and Dh55,000 respectively. Al Majaz and Al Nahda saw increases of 6 per cent and 5 per cent respectively, taking one and two-bedroom prices to Dh45,00/Dh55,000 and Dh45,000/Dh60,000.
The overall positive market sentiment at the start of 2014 has also seen the reprisal of a number of stalled residential projects and launch of several new projects in the Northern Emirates, which Asteco expects to boost current stock in the next few years.
RAK Properties recently launched the 141-villa Bermuda Villas project in Mina Al Arab, Ras Al Khaimah and Emaar also unveiled its Sharjah-Dubai border development. Al Mamzar Lake, which features waterfront homes, serviced residences, retail amenities, fountains and water-themed leisure attractions.
''This surge in the development pipeline in the Northern Emirates is a positive reflection on the future prospects of the UAE real estate sector as a whole. We are seeing investor confidence return as the country pushes ahead with the next wave of infrastructure projects that will create opportunities to build new communities supported by the requisite access, facilities and services that long term residents would expect,'' noted Stevens.
Source: Cleofe Maceda, Senior Web Reporter, gulfnews.com