The earlier trend of the mid- and lower-income segment moving to Dubai‘s fringe locations or to the Northern Emirates is set to reverse

With Dubai’s affordable housing programme getting a major fillip following the government’s strong support – and given that an increasing number of developers are looking at provide such housing schemes – Dubai’s southern districts, where most of the low-cost developments are coming up, are set to witness a sharp growth in the working class population.

Dubai’s low-cost housing initiatives, gaining momentum since the recent approval of the low-income housing policy by the government, is also having a knock-on effect in the Northern Emirates.

“A spate of new affordable housing projects coming up in Dubai’s southern parts is set to trigger a reverse migration to Dubai, leading to sharp falls in rents in Sharjah and Ajman. Over that, some landlords are even offering monthly payments and rent-free periods to retain tenants,” said A Najeeb, managing partner of M.S. International Real Estate.


Dubai’s new housing policy, which aims at providing residential units for low-income working people while renovating some old areas, classifies low-income people into Emiratis and non-Emirates, in strategic sectors in Dubai.

The policy will also include families’ income levels, place of residence and public benefits and will compare them with current requirements and the challenges faced by the families.

According to analysts, the domino effect of the new affordable housing projects – mostly located in Jumeirah Village Circle, Dubai South, Al Furjan, IMPZ, International City, Dubai Sports City, Studio City, and Dubailand – will be felt across Sharjah an Ajman, from where a reverse migration of the working class will eventually take place. This will lead to nose-diving rents, lower property prices and overall ease of traffic, realty analysts said.

Changing faces of emirates

According to John Stevens, managing director of Asteco, there will be further decline in rents in Sharjah and Ajman in 2017, if the supply of affordable property continues to stifle demand in the Northern Emirates.

“Sharjah and Ajman are expected to experience more downwards pressure on rates, in comparison to Ras Al Khaimah and Umm Al Quwain,” said Stevens. In 2015, the Dubai Municipality, as part of a major initiative, defined affordable housing for the first time as a “living space for people whose salary is between Dh3,000 to Dh10,000 per month.” The civic body allocated over 100 hectares of land for affordable housing in Muhaisnah 4, Al Qouz 3 and 4, mostly to meet the demand for dwellings for people in this income category. The developments will house more than 50,000 people.

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