Dubai property hikes: Residents urged to ‘spend smarter’, ‘save better’

Published: Updated:
Read Mode
100% Font Size
5 min read

Residents living in Dubai who are experiencing soaring rental hikes as the emirate's property market booms are being urged to ‘spend smarter’ to cope with rising costs.

As Al Arabiya English reported this week, inflated property prices across the emirate are forcing cash-strapped residents to pack their backs and downsize as surging rents outstrip salary increases.

For all the latest headlines follow our Google News channel online or via the app.

Dubai’s property market rebound has boomed in 2022 as the emirate’s economy continues to make a strong post COVID-19 recovery. For many residents, they face a battle with rising rents while facing stagnated salaries that are not at par with the homes they rent.

Rupert J Connor, a partner at Abacus Financial Consultants LLC, said residents struggling with rental hikes can follow some money-saving tips.

“I would start with reviewing any debt - debt will be impacted by inflation and rising interest rates. For example, on mortgages there may be an opportunity to refinance and reduce costs. Also review other debts and try to reduce rates/costs – for example, personal loans, credit cards, student loans, etc. You always want to get rid of high-interest debt first, so it could make sense to pay this off and get rid of it, or at least make it less expensive - some credit cards have zero percent interest plans, for example.”

Connor said residents can also review insurance payouts.

“Personal insurance (life or critical illness cover) might be difficult as it gets more expensive as you get older, but things like home insurance or car insurance – this is a good time to shop around and see if you can get a better deal, or rethink your level of coverage to make sure you’re only paying for the cover you need.”

Renters can also review their monthly budgets.

“Review your household spending – sit down at the end of the month and review your spending. What was necessary and what could be avoided? Gain a better understanding of your spending habits and actively budget moving forwards, sitting down and reviewing monthly.”

“Review autopayments and subscriptions. This might not seem like much, but often a big one. People tend to build these up over time and because it happens slowly and you don’t have to think about the payments, you don’t quite understand how much is actually there.”

“Do you really need five streaming services, the extra Ultra HD package plus 5 additional users, Adobe Photoshop, six magazine subscriptions, etc? This can usually add up to well over £1,000 per annum, so if you’re trying to save a little in the face of inflation, it’s a decent place to look.”

Residents can also shop smarter.

“You have to feed the family, but you can usually save a lot by shopping smarter with your groceries – make use of sales/deals, buy in bulk where possible, swap out brand names for generic products, incorporate more meatless meals, use more low-cost staple food sources like pasta and rice, and avoid all the needless additional items or items that aren’t on the shopping list. Even sign up for rewards schemes. Check what’s in the house already, make a list and stick to it.”

The biggest help would be for residents to try and increase their monthly income.

“Prices are rising? No problem, if you’re income is also rising. Easier said than done of course, but plenty of ways this is achievable – negotiating pay rises with employers, understanding the industry/market and potentially changing jobs for better pay, taking on additional work/part-time work/consultancy work, starting a side project, or simply selling things you don’t need. For our target market, do you really need the Porsche for Sunday drives, when you’ve got the family cars for practical use?”

Residents still also need to make room for investing, he said.

“Often the last thing on people’s minds, but incredibly important. Perhaps contributions reduce if there is belt-tightening across the board, but important to try to keep at least a little continuing month to month and try to get back up to normal levels again as soon as possible.”

“In the future, you will thank you. It might seem like a bad time to put money into the market when headlines are so scary, but it’s important to remember why you were investing in the first place – if your goals haven’t changed, then you still need to save for them no matter what is happening in your financial life.”

“And remember, the whole point of investing in the first place was to beat inflation and maintain the purchasing power of your money over the long term – that hasn’t changed, so your behavior shouldn’t either.”

Read more:

Dubai residents forced to move as soaring rents ‘far outstrip’ salary increases

New developments poised to enter Dubai property market

Football fans snap up Dubai’s luxury short-term lets for Qatar World Cup

Top Content Trending