Living in northern emirates no longer a hardship posting

Sharjah already permitted Gulf nationals to buy property, but has now extended this privilege to UAE residents.

Dubai property prices may have made steady declines since mid-2014, both to rent and to buy, yet valuations are still beyond the means of many working families and an increasing number are braving a longer commute from the Northern Emirates, which not only offer vastly cheaper accommodation but rapidly improving amenities too.

Propertyfinder data shows online viewings of homes in Sharjah, Ajman, Umm Al Quwain and Ras Al Khaimah (RAK), which together comprise the Northern Emirates, more than tripled year on year in 2016 to nearly 240,000. Of these, about three-quarters were for rentals, with the remainder from potential buyers.

This surging interest can be explained with some simple maths - Dubai's average household annual income among expats is thought to be around Dh200,000. Banks restrict mortgage lending to three to four times a borrower's salary. So, families with such earnings can only buy property for up to about Dh800,000. There are few family-sized homes for sale at such prices in Dubai and similar affordability issues blight the rental sector.

In Ajman, three-bedroom units are on average advertised for rent at just Dh50,000 per annum, Propertyfinder data shows, while same-sized homes in Sharjah and RAK are listed at Dh73,500 and Dh99,500 respectively. That compares with a median of Dh180,000 in Dubai.

Similar price differences are found across all unit sizes, with RAK nearly half the price of Dubai, Sharjah offering a discount of about two-thirds and Ajman of around three-quarters.

Cost savings
The primary motive to move further afield may be to save money, but the swiftly developing lesser-known emirates are far from a hardship posting, offering excellent amenities and an outdoor lifestyle.

RAK is perhaps the most advanced in terms of leisure facilities, with seven five-star hotels listed on booking.com, while Al Hamra Village includes a world-class 18-hole golf course, marina, yacht club, mall and 4,000 residential units. However, prospective tenants and homeowners should be aware that residents in Al Hamra Village have been embroiled in a dispute with the developer over utility charges for several years.

The emirate's Hajar Mountains are a magnet for rock climbers, cyclists and hikers, while neighbouring Umm Al Quwain's Khor Al Beidah wetlands are home to dozens of bird species and its mangroves are a natural wonder.

Sharjah's rich Islamic history makes it an attractive destination for Middle East investors preferring a more conservative lifestyle than Dubai. The emirate has long permitted Gulf nationals to buy freehold property, but in recent years extended this privilege to all UAE residents.

Sharjah's Al Tilal City is its first freehold community, with land plots starting from Dh950,000 and the mixed-use community is slated to eventually become home to 65,000 residents.

Few mortgages available
Relocating to the Northern Emirates is an easier proposition for would-be tenants than buyers as very few banks are willing to provide mortgages on properties outside Dubai or Abu Dhabi.

Buyers unable to secure a mortgage have two options - buy in cash, or purchase off-plan and pay in installments as per the developer's requirements. The limited mortgage availability also hinders the secondary market, which in turn weighs on prices and so cash-ready buyers may be able to drive a hard bargain.

As with any purchase, potential buyers requiring a mortgage should consult with a professional mortgage advisor, such as mortgagefinder.ae, who can provide information regarding which banks are lending in what Emirates and exactly what your options are. Banks are constantly reviewing policies. So, what may have been the situation some time ago may no longer be the case now.

The writer is chief commercial officer of Propertyfinder. Views expressed are his own and do not reflect the newspaper's policies.