Dubai property prices may have made steady declines since mid-2014, both to rent and to buy, yet valuations are still beyond the means of many working families and an increasing number are braving a longer commute from the Northern Emirates, which not only offer vastly cheaper accommodation but rapidly improving amenities too.
Propertyfinder data shows online viewings of homes in Sharjah, Ajman, Umm Al Quwain and Ras Al Khaimah (RAK), which together comprise the Northern Emirates, more than tripled year-on-year in 2016 to nearly 240,000. Of these, about three-quarters were for rentals, with the remainder from potential buyers.
This surging interest can be explained with some simple maths – Dubai’s average household annual income among expats is thought to be around 200,000 dirhams and banks restrict mortgage lending to 3-4 times borrowers’ salary, so families with those kinds of earnings can only buy property for up to about 800,000 dirhams. There are few family-sized homes for sale at such prices in Dubai and similar affordability issues blight the rental sector.
In Ajman, three-bedroom units are on average advertised for rent at just 50,000 dirhams per annum, while same-sized homes in Sharjah and RAK are listed at 73,500 and 99,500 dirhams respectively. That compares with a median of 180,000 dirhams in Dubai.
Similar price differences are found across all unit sizes, with RAK nearly half the price of Dubai, Sharjah offering a discount of about two-thirds and Ajman of around three-quarters.
The primary motive to move further afield may be to save money, but the swiftly developing lesser-known emirates are far from a hardship posting, offering excellent amenities and an outdoors lifestyle.
RAK is perhaps the most advanced in terms of leisure facilities, with seven five-star hotels listed on booking.com, while Al Hamra Village includes a world-class 18-hole golf course, marina, yacht club, mall and 4,000 residential units. However, prospective tenants and homeowners should be aware that residents in Al Hamra Village have been embroiled in a dispute with the developer over utility charges for several years.
The emirate’s Hajar Mountains are a magnet for rock climbers, cyclists and hikers, while neighbouring Umm Al Quwain’s Khor Al Beidah wetlands are home to dozens of bird species and its mangroves are a natural wonder.
Sharjah’s rich Islamic history make it an attractive destination for Middle East investors preferring a more conservative lifestyle than Dubai. The emirate has long permitted Gulf nationals to buy freehold property, but in recent years extended this privilege to all UAE residents.
Sharjah’s Al Tilal City is its first freehold community, with land plots starting from 950,000 dirhams and the mixed-use community is slated to eventually become home to 65,000 residents.
Relocating to the Northern Emirates is an easier proposition for would-be tenants than buyers as very few banks are willing to provide mortgages on properties outside of Dubai or Abu Dhabi.
Buyers unable to secure a mortgage really have two options – buy in cash, or purchase off-plan and pay in instalments as per the developer’s requirements. The limited mortgage availability also hinders the secondary market, which in turn weighs on prices and so cash-ready buyers may be able to drive a hard bargain.
As with any purchase, potential buyers requiring a mortgage should consult with a professional mortgage advisor, such as mortgagefinder.ae, who can provide information regarding which banks are lending in what Emirates and exactly what your options are. Banks are constantly reviewing policies so what may have been the situation some time ago may no longer be the case now.
Top searched for areas to buy and for rent in Northern Emirates
|Ajman Corniche Road||4.59%|
|Al Mamzar – Sharjah||6.81%|
|Cornich Al Buhaira||3.23%|
Ras Al Khaimah
|Al Hamra Village||46.06%|
|Mina Al Arab||20.69%|
|Al Marjan Island||9.37%|
|Ras Al Khaimah Creek||3.72%|
|Ras Al Khaimah Waterfront||3.33%|
|Sheikh Mohammed Bin Zayed Road||2.37%|
|Cornich Ras Al Khaima||2.18%|
|Deba Al Fujairah||44.47%|
|corniche Al Fujairah||27.06%|
Umm Al Quwain
|Umm Al Quwain Marina||70.16%|
|Falaj Al Moalla||4.99%|
|Al Salam City||4.87%|
|Emirates Modern Industrial||1.65%|
|Al Dar Al Baida’a||1.60%|