UAE sees expat exodus and shrinking real estate market

Is the UAE losing its sparkle as a top expat destination?

From being a top destination for ambitious expatriate professionals, the UAE is now facing a decline in the number of overseas workers planning to stay on or even to arrive. Professional expats in a number of sectors are drifting away to countries with more political stability and less racialist propaganda, leaving the locals to fill their jobs as best they can. Watchers are predicting the exodus will speed up rather than slowing down, affecting the housing market first and moving on to the retail sector.

Expat workers make up over 80 per cent of the entire population of the UAE as well as 90 percent of the emirates’ workforce, with the real estate, design and construction sectors the first to feel the chill winds of lack of liquidity. As a result, the housing market is expected to ‘soften’ until at least 2020/2021, when liquidity is expected to reassert itself in the sector. Most professionals don’t believe the present problems have anything to do with low oil prices, putting the blame on a ‘globally inspired situation’, whatever that may be. Oversupply as compared with demand in the housing sector has meant a number of off-plan projects have been shelved for the present, and rentals are dropping to lower levels as the supply of expat tenants declines.

At the present time, only the healthcare sector is alive and kicking, with several new hospitals now on the drawing board. The lack of liquidity is also leading to cost-cutting in the construction sector, with design companies now being picky as regards developers they’re prepared to work with. With the 2020 Expo 2020 looming, Dubai is now concentrating on retail, hospitality and well-being but, after the fun’s over, it’s not certain which direction it’s going to take as regards persuading expatriates to return in something like their former numbers.