Dubai housing costs soar to Manhattan peaks, forcing moves to outskirts

Wednesday, 24 September 2014 00:00 - - {{hitsCtrl.values.hits}}

Reuters: An economic rebound has catapulted house prices and rents in Dubai to Manhattan-like peaks, the Gulf emirate’s top property website says, forcing increasing numbers of residents to move to its cheaper outskirts or even to consider returning home abroad. Rents fell 1% in the third quarter after 10 straight quarters of price rises, property consultants CBRE reported this week. But the sustained cost of living surge has driven hundreds of families to relocate to smaller homes on the fringes of the opulent, highrise urban canyon that soars out of empty desert.

Research by Dubai website Dubizzle showed rents and house prices in Dubai’s prime locations now match those in Manhattan. “We’re talking about $ 2,000 to $ 3,000 (a month) for a rental in Manhattan,” said Ann Boothello, property product marketing manager at Dubizzle, which attracted 2.4 million monthly visitors to its property pages in the third quarter. “For a one-bedroom apartment in Manhattan it would be about 1.9 million UAE dirham ($ 517,388), which would be the same for a prime community here.” Dubai rents and house prices are estimated to have increased broadly by some 30% year-on-year, the highest growth rate in the world during the first half of 2014, according to various studies, while in some areas price rises have been much steeper. Middle- and low-income expatriate families have suffered most from rocketing rents, often including Indians and Pakistanis as well as expatriate Arabs and also some families from affluent Western states. Construction workers usually live in company accommodations but their families remain in their home countries. The property market in the city of 2.3 million people rebounded in the last two years after a more than 50% plunge in home prices from their peak in the aftermath of the 2008-09 global economic slowdown. Costs have kept rising and the emirate jumped to 67th spot among the world’s most expensive cities to live in the world compared to the 90th position last year, according to the 2014 Mercer cost of living survey. The leap in living costs was attributed in part to a significant increase in expatriate rental accommodation costs. Some rents in the Dubai marina, for example, jumped by more than 50% between August 2013 and February 2014.