As a Dubai resident, have you figured out your New Year resolutions yet? And does it have anything to do with moving homes? A study conducted by Service Market, a home services provider in Dubai, found that while last year saving money and getting healthy were the top resolutions made by Dubai residents, this year it could be rightsizing their homes.
Last year, out of the 75 per cent of Dubai residents who started the year with resolutions, over 6 per cent wanted to move to a bigger and better home and 8 per cent planned to buy a home. The number might go higher this year and easier to achieve as many Dubai residents are now leveraging lower rent rates and attractive investment opportunities to upsize. It is estimated that tenants usually move every two to three years, but in the last six months there have been several major shifts in moving trends in Dubai.
Contrary to previous years, when rental rates were going up, people moved to newly developed suburbs of Dubai to get better value for money. But the emerging trend is to leverage the softening market by either staying within the property longer and renegotiating rates or moving to a larger property for the same rate.
“With reducing rents and property prices, those who want to move should obviously look for spacious rooms and larger apartments,” advises Atif Rahman, director and partner of Danube Properties. “This is the time to bargain for more with less. If prices and rents match their budgets, we anticipate a reverse migration of residents from neighbouring emirates to Dubai as rents and prices become more comfortable.”
The study by Service Market found that 61.4 per cent of Dubai residents who moved upsized their homes, while 23.4 per cent moved into a house of the same size and only 16.2 per cent downsized. Rental rates had been decreasing across Dubai last year due to increased supply of new units, enabling an increasing number of Dubai residents to move to bigger homes. It has also become easier for growing families to find bigger homes that fit within their existing budget. Many tenants are, therefore, “rightsizing”, which means they can move to apartments that were out of their reach earlier due to budgetary constraints.
Reasons to move
There are several factors that drive people to move homes. According to the Service Market study, moving to a larger house was the primary reason for most respondents, while some wanted to live in a house with better quality or in a better neighbourhood. A lot of people moved to reduce the time spent on daily commute and live near their workplace or move to a home that was closer to their children’s home.
Residents have also moved because they have been distressed by maintenance issues they faced in their current home. Other driving factors have been tenants not being happy with the landlord, purchase of a new house or because the landlord was selling the house.
“With plenty of inventory stock and falling rents, residents now have better options,” says Sunil Gomes, CEO of Gemini Property Developers. “Dubailand, Business Bay, Downtown, Dubai Marina and Jumeirah Village Circle are the trending areas for the move-in market segment. Within the same rent bracket, residents now find a better area, better amenities and facilities, while investors have attractive options.”
According to Abdul Kadir Faizal, co-founder of Smart Crowd, the main factors prompting people to move homes is lower rents and better value for money in terms of space and quality. “For example, tenants in the Palm Jumeirah and Springs have started to move to locations such as Nshama and Mira due to the rents being 20-30 per cent cheaper in these places,” says Faizal. “[There is also] much more space with regards to the built-up area and outdoors. Besides, being a new build, there are less maintenance issues and they have warranties from the developer.”
Faizal expects further movement to newer developments such as the Bluewaters project by Meraas and The Creek phase one. “In 2019, we can expect this trend to continue where families especially will move to second-tier locations to reduce their cost of rent,” he says.
By Esha Nag, Property Weekly Editor