Househunting in Dubai

Moving to a new country and setting up house can be very challenging and this is especially true if you are trying to find accommodation for a family. Some companies provide accommodation and some provide an allowance as part of the salary to be used for accommodation. Before you sign a contract, make sure you know what kind of a deal you will be offered.

If you expect to have accommodation provided, it should match the size of your family, so ask how many bedrooms your company will provide you with and whether or not you will be supplied with a villa or an apartment.

Rental Regulations

If you are going to be searching for your own accommodation and you have a family, there will be two important considerations, the size of the property and the location relative to schools and/or your work. Compromises may have to be made initially, but as there has been a building boom in Dubai, it should be possible to relocate after the first year. By then, you will know so much more about the city and your needs. Moving is not difficult as labor is cheap, and there are plenty of small removals companies that will do a good job for a reasonable price.

If you are single and unsure what part of the city will suit you, you may be considering taking a room in an already tenanted apartment or villa. However, keep in mind that although this is a perfectly acceptable way to live elsewhere, this practice is frowned upon by the government as they do not consent to unmarried males and females sharing accommodation. Officially it is not sanction, but in practice it is ignored unless you are unfortunate enough to draw attention to yourself for some other reason, for example getting arrested for driving under the influence of alcohol. This is a serious offence as there is zero tolerance in the UAE. What the consequences might be in such a scenario, no one can say for sure. The officials in Dubai are pragmatic and unlikely to pose a stringent penalty on non-Muslims for house sharing, but the driving offence would usually lead to a short jail term followed by deportation.  Taxis are readily available, so this should not happen to you.

If you are intending to rent an apartment or villa, the next big issue is to ascertain how much of the rent is required up-front. In the past, it was necessary to pay the whole 12 months or, if that financial commitment was beyond you, to pay an initial deposit of three months plus hand over post-dated checks for the outstanding amount.  These days, things have eased and it may be possible to get the agent to negotiate a better deal as many landlords are eager to let and will be flexible. How flexible depends on your negotiating skills, the area the property is in and how much competition there is for the property. In less desirable areas, rumor has it than some landlords are now willing to accept 12 monthly payments. Think of it as a bargaining situation but be prepared to cave if you really want the property.

When signing a rental contract, the bottom line is that you and the owner will be making a one year commitment on whatever payment deal you strike, and there are consequences if you break this contract.  However, you are protected by the contract as well, and the landlord is not allowed to make unreasonable rental increases at the end of the year if you want to stay in that apartment or villa. As housing development began to rapidly increase, the Dubai Government acted to protect all parties involved in rental agreements and the Real Estate Regulatory Agency (RERA) was established in 2007. Increases in rental are now governed by Amiri Decree 2 of 2011. There is no specific percentage as the amount of the increase allowed depends on the current rental in comparison to other similar rentals, but generally, it is unusual to have an increase above 15%. If you feel you are being treated unfairly, you can bring a case before the Rental Committee.

Rental Costs

Rental costs in Dubai were high before 2008. There is good news now as the cost of renting has dropped, and despite predictions of rises this year, the reality is that costs are still down. However, renting is still a significant expense on arrival in Dubai.

A villa could cost as little as AED 100K in Mirdif, but AED 500K is not ridiculous for a villa in areas such as Palm Jumeirah should anything be available.  Anywhere along Jumeirah Beach Road or Al Wasl Road is desirable due to being in the vicinity of the beach. Currently, 2013, there are a range of luxury villas in Arabian Ranches with 3-6 bedrooms and nearly as many bathrooms ranging from AED 190K per year to over 300K. They are 2.5K to 5K sq. ft. in size, or more, and many have pools. Arabian Ranches is inland from the center of Dubai but has good road links and a well established community. In The Springs, a more centrally located development, prices are under AED 200K, but it may be unrealistic to expect the same size or luxury for the price.

A one bedroom apartment in a top location could cost over AED 100K per year. However, if you look around, there are bargains. A one-bedroom partly furnished in, for example, Sky Gardens can be found advertised for AED 85K, but it has certainly been possible to get a two-bedroom apartment there for AED 70Krecently. So, with a little of shopping around different letting agents, bargains can be secured.  Sky Gardens is in the Dubai International Financial Center (DIFC), a very buzzy area for an upwardly mobile couple or small family. It is near Dubai Mall and has the fashionable DIFC restaurants and bars a short walk across the road, an oddity in a country where walking anywhere is unusual.  Like all new apartment building, it has ample parking in the basement and a delightful pool area on the roof.

It is possible to get very reasonably priced apartments, a one-bedroom apartment for AED 35K, in areas such as Warqaa, a more remote suburb just beyond Mirdif. These apartment buildings seldom have pools and tend to stand in sandy plots with no facilities such as shops nearby. However, they do have free parking in the sandy lots unlike the more popular parts of Dubai where casual parking is AED 2 per hour during business hours unless you have a designated park in the building’s basement. In the older parts of Dubai, parking for apartment dwellers can be difficult as these older buildings had little or no parking provision.

Pitfalls and Benefits

The things to think about when looking at villas are the age of the villa and how committed the owner is to doing essential maintenance. Older villas often do not have double glazing. This makes running the air-conditioner (AC) expensive. While you will not need to use the AC much if at all in the winter, it is essential in the summer.  Most people run the AC 24/7 even if they are at work and the house is empty. During the height of summer, it is not only hot, it is also very humid. The level of humidity comes as a surprise to many people as we often do not imagine a desert to be humid.  It is unpleasant to arrive home to a hot house, and it can take hours to cool it down if you have chosen to turn off the AC during your working hours. So you either pay the money to keep cool or pay in terms of the discomfort you feel. Apartments, whether double-glazed or not, are less expensive to cool due to their size but also because, being clumped together, they are not so exposed to the relentless sun. Some buildings include the cost of the AC in the rental.

Many villas come with pools. These require maintaining, but if you know nothing about pool maintenance it will be possible to employ someone to do this for you and look after your garden at a reasonable rate. That same person will probably clean your car daily or weekly depending on the arrangement you make. Almost all villas have accommodation for a housekeeper, commonly known here as a maid.  The quality of this accommodation varies depending on the age of the villa as the more modern villas tend to have had more attention paid to design.  However, it is usually a bedroom and separate bathroom. Many apartments also have maid accommodation. Sometimes it is suitable to be used as a nursery if you do not employ a maid. However, in apartments, the maid’s room may not have a window.

Locations

Like most countries, there are desirable and less desirable areas. Places like Jumeirah and Dubai Marina command high prices because they are close to the beach. DIFC is central and fashionable. The Arabian Ranches, while neither particularly central nor near the beach is an extensive community with a reputation for good design and build quality, so it too is at the high end of the market.

There are many other desirable communities that are somewhat less expensive such as The Lakes, The Meadows, and The Springs. The Um Suqeim district is pleasant and near the buzzy parts of Dubai, but there are plenty of suburbs that have their own attractions.

There was a time when people often chose to live in the northern emirates such as Sharjah, Ajman of Ras Al Khaimah because it was cheaper. There is another price to pay though as Sharjah and Ajman are bottlenecks through which all traffic heading north has to pass, so you pay in time spent commuting. While this is currently being addressed for the second time in eight years, the first attempt having been too timid to really relieve the pressure, the savings do not justify the time lost these days when Dubai is more competitive. And it is worth remembering, that if you have children attending school in Dubai, they too will be spending large chunks of their lives waiting in traffic.

Buying a Home

Unlike many countries where foreign investment is discouraged, in Dubai, it is possible to buy property in many of the developments.  Allowing foreign ownership of property in the UAE is relatively new; for this reason, clearly established guidelines on residence visa eligibility are not available. However, the Dubai government is attempting to rationalize all the issues and does have a list of approved dealers on its website.

Prices fell dramatically post 2008. Also, some building projects never came to fruition, so there are pitfalls as with any real estate purchase. Recently, prices have begun to rise and those interested in speculating are active in the market again.

Some websites suggest that to get a residence visa you must have an income of AED 10K a month and have paid at least AED 1 million for the property. This is likely to allow you to have a six-month multiple entry visa at a cost of AED 2K. But, the right to renew is not clear, nor is it clear whether this can be done from inside the country or if a return home to renew is necessary.

Many people do opt to buy rather than rent. If your company is giving you a substantial amount of money towards rental, this can often be used to cover a mortgage on a property in the normal way. If you are buying in a gated community or an apartment, do keep in mind that there will be on-going yearly costs to do with management fees. Also, as a tenant, you can move with an ease that is not available as an owner.