UAE: Despite traffic, tenants move to bigger units in same emirate to enhance lifestyle

Tenants in the UAE are increasingly looking to relocate to bigger units and more upscale communities within their emirates, rather than moving to other emirates to enhance their lifestyle.

During the economic booms witnessed during 2007-08 and 2014, many tenants moved to Dubai from the neighbouring emirates to beat traffic. However, according to real estate industry executives, residents are increasingly braving the inter-emirate traffic to benefit from better rental rates and larger property sizes.

Traffic between Dubai, Sharjah and Abu Dhabi has again increased substantially as the population has risen massively across the country due to the inflow of more foreign workers. Dubai’s population increased by 100,000 last alone year.

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Importantly, a million during the day as people from the other emirates to the region’s largest financial and business hub for work and businesses every day. Dubai’s population increased massively by 100,000 in 2023 to 3.65 million.

“Dubai has witnessed an exponential population boom with more people choosing it as their full-time residence,” said Alina Adamco, head of sales at Metropolitan Homes.

“We have observed a significant number of tenant relocation requests, driven by various factors including moving from older to newer buildings and communities, transitioning to larger properties, shifting from apartments to townhouses and villas and moving from more crowded areas to those with superior infrastructure,” she added.

“Despite the heavy traffic between Sharjah and Dubai, tenants are willing to endure it in order to benefit from the better rental rates and larger property sizes,” she added.

Jacob Bramley, leasing manager at Betterhomes, said they have not observed significant movement from one emirate to another among tenants.

“Many people who work in Dubai commute from Sharjah or Abu Dhabi but choose to reside there due to proximity to family or a preference for that particular Emirate.”

Bramley added that they receive numerous enquiries from tenants residing in Abu Dhabi who wish to relocate to Dubai. “However, there is comparatively less demand for residential communities in Sharjah and other emirates.”

Decrease in availability of rentals

Adamco added that prior to the current rally in property markets, investors mainly purchased properties for rental income or resale.

However, Adamco added that there are a growing number of buyers acquiring homes for personal use, often relocating their families.

“This has resulted in a significant decrease in available rental properties, leading to a noticeable rise in rental prices. Additionally, increased occupancy rates across communities are putting pressure on existing infrastructure, potentially leading to longer commute times and increased traffic congestion,” said the head of sales at Metropolitan Homes.

According to Betterhomes, rents continued to increase in 2023, recording a 24 per cent surge in the average rental price of new tenancies in Dubai.

“Rising prices have resulted in higher tenant retention rates, with occupants opting to renew their contracts instead of searching for new housing, leading to an 18 per cent decline in leasing transactions at Betterhomes,” it said.

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