People must look at Dubai and at all of the construction going on with hotels and apartments and wonder who on earth will occupy all of these dwellings? Undoubtedly the population and international fan fair of the U.A.E. is growing at an outstanding rate, but popularity doesn't put money in the piggy bank, so how a) do people afford to visit the U.A.E. and b) hotels find people who can afford to visit the U.A.E.?
This query spirals from the realisation that there are some people with a lot of excess money. Note that it says excess money, not merely money. The going rate for a hotel in Dubai is 2'000AED per night in the high season. This means that for a room to be occupied for a weeks duration, the guest is looking at a nice 14'000AED bill. That is not the half of the story. Most hotels in Dubai alone are fully booked during the high season. This means that during this time there are thousands of people in the country who can afford to spend 14'000AED on a roof over their head with a bed and sheets that they could have bought for that money! Kudos to the people who have worked hard to make that money and get themselves a lifestyle that provides that, but who are these people and how does someone become one? Everybody has bills to pay. Every day people stress worldwide about where the next payment will come from. And, those who don't stress are excited to realise that they may have a couple of hundred left over in their savings to go out to a nice restaurant on the weekend. So how much money does someone actually have to make for this hundred left over to become 14'000AED left over? And at what point do they stop saving for that rainy day?
Visitors to the country aside, it is the people who want to stay here that make me think of who will live in these apartments that are being built and why Dubai keeps investing.
A search will show you that the cheapest rental property available in DUBAI is at international city where an occupant can get a one bedroom or studio apartment for 48'000AED per year. This obviously works out to 4'000AED per month. A university graduate is offered a starting salary of 6'000AED per month. Meaning it is literally impossible for a graduate to live alone. Therefore they must be wiped out of the category of who is living in these apartments being built. Alternatively, the next people up is men who are sending their money back to their families. Now, most of these people don't make 4'000AED in a month so choose to live with 25 other people in this one bedroom apartment so they can afford the rent. But, wait a minute, that is illegal, so, no, cross them off the list too, they also couldn't be occupying these dwellings. It works out that the people who live in the cheapest accommodation are young late twenty early thirty year olds who have hit Dubai as their second job in life with some experience under their belt and want to travel the world but do so respectable, not just the typical hit Europe and backpack way. For these people their salary is normally 12'000-15'000 and they can afford to have both the apartment and their car loan. But they won't get anywhere more expensive then this because they don't want to waste their hard earned money. They will stay in their 4'000AED per month one bedroom apartment until they leave the country. So this still leaves us with the question of who will rent these expensive apartments that are being built in masses?
The answer that seems to come up often is it is the companies that will rent these apartments and villas. Companies provide housing allowances to their employees to put a roof over their head while they are in the country. This is why the U.A.E. keeps on building. As is well known, every company in the U.A.E. has a 51% Emirati owner. Therefore, the money goes out of their piggy bank, and paid as rent back into the country. The country then ensures that other nationals get jobs through Emiratisation so they continue to get the money back. It's as simple as transferring money from the left to the right hand.
So next time you look out the window at all of the construction going on and ask yourself who will occupy them... the answer is that Dubai will.
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