Dubai tenants stay put - for now

Apart from a drop in their rent, tenants are looking for better facilities, such as a swimming pool, reserved parking and a gym. Jeff Topping / The National

Commuters resist drop in capital's rents Analysts predict people will head to Abu Dhabi after new developments hit the property market by 2012 and push down home prices Ramola Talwar Badam DUBAI // A fall in rents and a wider choice of homes during the next two years could tempt back to the capital commuters who have moved to Dubai, say tenants and analysts. Renters estimate that a large increase in the number of properties in Abu Dhabi by 2012 will push prices down.

But, for the moment, most tenants in Dubai have no plans to return to the capital, despite the punishing daily journey to work. "It hasn't yet reached a threshold that justifies my moving back," said Shabeel Yusuf, who lived in Abu Dhabi for four years before heading to Dubai early last year. A report published last week by the Middle Eastern property firm Asteco Property Management showed that rents in Abu Dhabi had fallen by up to 15 per cent in the past three months.

The report highlighted the bargaining power of prospective tenants with 8,000 new homes on the Abu Dhabi market by the end of the year. However, Asteco also revealed last week that rents in Dubai had fallen by up to eight per cent in the past three months. It seems that for those who are settled in Dubai only a further fall in rents would make a return to the capital cost effective. "A flow back to Abu Dhabi will not happen unless you get good one-bedrooms for Dh60,000," said Mr Yusuf, who owns a trading and paint contract company in Abu Dhabi. He said moving back would be an option if this price were quoted for apartments on Abu Dhabi's outskirts.

Other must-haves are reserved parking, swimming pools and gym facilities, which are all features of new Dubai developments. "My social life is good, there are more restaurants here. I have become spoilt," said Mr Yusuf. "I have become used to community living with a couple of pools, a gym, a large supermarket." A one-bedroom flat in Abu Dhabi without similar facilities would cost more than double the rent on his Dh54,000-a-year apartment in Dubai's Motor City.

Commuters who want to end the daily return journey would look at Abu Dhabi once a flood of property was on offer and developments such as Al Raha Beach and Reem Island were handed over, said Pratima Dutt, a Dubai-based real estate consultant. "It will take 18 to 24 months for enough supply in Abu Dhabi to drive rents down drastically enough for people to move out of Dubai," she said. Rents in the Corniche, which are upwards of Dh130,000 for a one-bedroom apartment and Dh210,000 for a two-bedroom, needed to drop a further 40 per cent to bring prices to realistic levels, she added.

Shirley Morrison, the managing partner of Executive Expatriate Relocations, said Dubai was the first choice of some clients with offices in Abu Dhabi. "They prefer to reside in Dubai because of more international schools, the nightlife, choice of eateries," said Ms Morrison, who works with telecommunication and shipping companies. This thinking is echoed by Fares Sumairi, a Yemeni marketing director of an Abu Dhabi-based food processing company. "One big factor is that Dubai is cosmopolitan. We are comfortable here, I feel it's my hometown already," he said. The hour-long commute at top speed is a routine to which he has grown accustomed for more than a year.

"Abu Dhabi could be an attractive proposition in two years when new projects settle down," said Mr Sumairi. He and his wife are unlikely to leave Dubai, but he knows others who may move to Reem Island, which resembles Dubai's Marina area. Many commuters upgrade cars with the money saved on rent. VM Kumar, the regional manager for Jet Airways, said that moving from a Honda Accord to a Volkswagen Touareg helped him to enjoy the daily drive to the airline's Abu Dhabi office.

He pays less than half of the average Dh210,000 rent for a Corniche two-bedroom flat for a spacious two-bedroom in Dubai's Al Barsha. Reserved parking space, a variety of restaurants and two supermarkets within a five-minute walk from his home also tilt the scales in Dubai's favour. He loves the drive, but his wife worries that he may doze off at the wheel. Psychologists say that long drives can have a sleep-inducing effect. Dr Raymond Hamden, a clinical psychologist based at the Human Relations Institute in Dubai, said that drivers should sit upright, change radio channels and wind the windows down to stay alert.

"You need some physical activity because a hypnotic reaction can be dangerous. Stripes on the road can have a hypnotic effect. It can cause a person to become sleepy," he said. Stress also takes a physical toll on commuters. "If they are running low on energy, if their blood sugar is low, it can cause headaches or dizziness when faced with a long commute," said Dr Melanie Schlatter, a health psychologist at the Well Woman Clinic in Dubai.

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