‘The situation is getting worse and worse’: surging rents in Fujairah take huge toll

Residents in Fujairah say soaring rents are taking a huge financial toll, that wages are not keeping pace and that the situation is getting worse.

Property agents in the emirate have backed up their concerns and attribute the rise to a swelling population and lack of new housing.

“We are spending far too much of our salaries on rent and have so little left over for basic necessities,” said Milane, 25, a Filipino.

“When I first leased the apartment in the Safad area, the agreement was for Dh18,000. Last year the landlord demanded me to pay 10 per cent extra or else leave,” said Milane, who works in the retail sector.

“Now I pay Dh20,000 for a one-bedroom property and it will be Dh22,000 when I renew my contract next month. Our wages can’t cope if this continues.”

Radwan, a Moroccan, who also worked in retail, agreed.

“I have worked in Fujairah since 2011. When I first came here with my family, I rented a two-bedroom apartment in Madhab for Dh24,000,” he said. “When the landlord requested a 25 per cent increase last year I couldn’t afford it, so I sent my family back and left,” said Radwan, 31.

“Now I am sharing a one-bedroom [apartment] in Al Gurfah for Dh21,000. The situation is getting worse and worse with rising rents and flat wages.”

According to Skyline property agency, almost all areas of Fujairah and all sizes of properties have risen in the past 16 months.

Ibrahim Ali Lahbash, the Skyline director, said the emirate was undergoing a profound change.

“We mainly cover Kalba, Khor Fakkan and Fujairah. Between 1998 and 2001, the median price of a two-bedroom apartment rental was Dh14,000. The real estate boom started from 2002 and lasted until 2007. During this period the rents increased to Dh50,000,” said Mr Ali Lahbash, who has been working in Fujairah since 1998. “After the financial crisis in 2008, the prices went down to Dh30,000 for renting a two-bedroom apartment. At the beginning of 2013, the prices went up again to Dh40,000 due to the huge demand and attractive business climate. Most tenants prefer Al Rostumani and Al Jabir Buildings, the most expensive places to live in with an average price of Dh80,000.”

Al Rostumani and Al Jabir were Dh60,000 at the start of 2013, he said.

Mohammed Ali, a property agent in Fujairah city, said he had noted a rise of 17 per cent since last November. “The average price of a two-bedroom apartment had been Dh36,000 to Dh37,000 but now it has increased to reach Dh40,000 to Dh42,000,” he said.

Expatriates must pay a non-refundable 2 per cent of the their total rent to the authorities as documentation of the contract.

In addition, a Dh1,500 to Dh2,000 deposit which must be given to the Federal Electricity and Water Authority increased pressure on tenants, he said.

In its report for last year, the Fujairah Statistics Centre showed how the population of the emirate was surging.

In 2013 the population stood at 192,190 – up from 172,646 in 2011.

The 2013 figure included 74,889 Emiratis and 117,301 expatriates.

“From my point of view, some people move to Fujairah to get away from overcrowded cities and seek peace of mind. Economic improvement and continuing developmental projects in Fujairah have played a major role in increasing the rents by providing thousands of job opportunities to UAE nationals and expatriates.”

Mr Ali said a lack of new property projects had also affected the rents. “The number of new rental properties coming on to the market has failed to keep up with demand. This is why we have seen a growth in rents.”