Property prices in the oil-rich United Arab Emirates (UAE) have seen tremendous increases over the past decades. Fantastic career opportunities in a great many sectors – particularly construction, finance, oil and gas – have drawn expats from all over the globe, growing these small desert areas into the impressive and wealthy emirates they are today. The sustainability of such rapid expansion, both physically and economically, has been called into question in recent years with many expecting the ‘expat bubble’ to burst. However, a recent survey shows that despite these predictions, expats in the UAE are here to stay.
The study, conducted by financial comparison website compareit4me, canvassed the views of 1500 expats currently living in the UAE. The survey sought to understand the financial intentions of expats residing in the UAE and found that, of the respondents, nearly three quarters (74%) are considering buying property in the country.
This is in stark contrast to last year’s survey, which found that more than half (54%) of respondents wouldn’t even consider buying a property here – house, flat, or villa – as they were unsure as to how long they’d be staying in the country. So why are so many expats now seeking to lay down their roots in Abu Dhabi, Dubai, and the other emirates? What’s caused this change of attitude among UAE expats?
According to analysts, a cooling off in the UAE property market has been a significant factor. The falling price of crude oil over the past year has had a knock-on effect on property prices in the area, making them more appealing for expats to buy. Now that the market has slowed, concerns that the expatriate bubble is due to burst have lessened and the increased stability has allayed many of the fears and insecurities many had about the future of the UAE.
Last year, the average price of property in the UAE dropped by between 10% and 13%. Many expats will have been renting during this time in anticipation of a slowing down in the property market and see now as the perfect time to commit to life in the UAE. Despite these price drops, interest continues to be strong, particularly among long term investors. The recent rebound in oil prices over the past two months is also cause for optimism among investors.
Research from compareit4me also found that the population of the UAE is expected to grow to 12.41 million by 2030 from a current level of 9.5 million – 84% of whom are expats.
With recent developments there’s no reason to suspect that the UAE expat bubble is due to burst. Having suffered a slight setback in the last year, expats are now confident that the property market is sufficiently stable to warrant settling for the long term. The outlook remains positive and the region is expected to experience growth over the coming years – albeit at a more sustainable pace than before.
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Information correct at time of publication.