Fujairah’s cheaper cost of living sees influx of expats



FUJAIRAH // Rising living costs are leading to internal migration within the country as residents move to cheaper areas to make ends meet.

The trend of expats moving from Dubai and Abu Dhabi to the Northern Emirates in part led to a 5 per cent increase in foreign residents in Fujairah last year, according to the Fujairah Statistics Centre.

In 2014, there were 123,000 expatriates in Fujairah, a figure that rose to 130,000 last year.

Motaz Al Gaabi, a 36-year-old Lebanese father of two, moved to the emirate last year mainly because of expensive school fees in Dubai.

“When I started to look for a school for my four-year-old boy I was shocked. The fees [in Dubai] were so high and didn’t fit our budget, so I considered moving to Fujairah as the school fees were almost half of what we were supposed to pay in Dubai,” he said.

“Here I pay about Dh6,000 for my kid for KG1, while they wanted Dh11,000 in Dubai.”

An engineer for a shipping company in Fujairah, Mr Al Gaabi said he managed to save money in the emirate.

“There is a big difference in almost everything here compared with Dubai – the rents are much lower, there’s no need to drive miles to get to work and the shopping choices are limited, which makes you automatically buy only the things you need, without exaggerating,” he said.

“I have two kids under four and my salary is Dh15,000, less than what I used to get in Dubai. But we are living in a two-bedroom apartment and we spend our weekends by the beach.”

The drop in oil prices affected many businesses across the UAE, resulting in salaries stagnating or even falling – ­making expats think twice about their life in the country.

However, it has also had the effect of making residents think about moving to other ­areas of the country.

“This has hit many expats in the pocket quite severely because, despite statements from property consultants saying that rents are on the decline, many residents have seen landlords try to hike rents,” said Julian Vydelingum, a chartered financial planner at Killik Offshore.

“Places such as Al Ain, RAK and Fujairah have improved their facilities, infrastructure and residential communities significantly in recent years. Many expats have decided to relocate to these areas to reduce their ongoing living costs without compromising their quality of life.”

Another expat said that her daughter was working in Abu Dhabi but, owing to the high cost of living, had moved back to Fujairah where she grew up and found a new job.

“When my daughter started to look for a job she preferred to work in Abu Dhabi,” said Eman Al Boryni, a 52-year-old mother of five.

“They offered her a good salary but it wasn’t enough. The rents were high and she had to adopt the lifestyle. By the end of each month she would ask me for some money.”

Ms Al Boryni said that the move back was a relief for her daughter because she could now get to work in less than 10 minutes, instead of spending 45 minutes on the roads of Abu Dhabi. “She is saving time and money here.”

Jamal Shuraih, director of Al Bayader real estate agency in Fujairah, said that an inexpensive one-bedroom flat in Dubai or Abu Dhabi could work out the same as renting a three-bedroom flat in central Fujairah.

“There is a huge difference in the property prices and therefore big families prefer to find jobs and settle down in emirates such as Fujairah, where they can pay Dh55,000 for a three-bedroom apartment in the city,” he said.

“The cost of living is lower here and people enjoy the peace and quiet of Fujairah and find it more suitable for kids, away from the hustle and bustle of the big city.”

rhaza@thenational.ae

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Elvis
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UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions