Dubai housing squeeze pushes middle-income expats out to the suburbs

While Dubai continues to pump out sumptuous new apartment blocks, for a rising number of expatriates the city no longer offers the luxury lifestyle that lured many foreigners to the Gulf.

A shortage of affordable homes and a reduction in overseas allowances since the financial crisis are pushing foreign staff on middle incomes out to less glamorous areas of the city far from the office, or to neighbouring Sharjah.

Investment bankers, lawyers and top managers at multinationals may enjoy seven-figure salaries but other expatriates - from architects, accountants and information technology managers to legal secretaries and HR executives - are often on household incomes of 10,000 to 30,000 UAE dirhams a month, says property consultants JLL.

They can afford annual rents of 72,000 dirhams, says JLL, or could buy a property for around 790,000 dirhams - a fraction of prices in expatriate neighbourhoods Dubai Marina and Dubai Downtown, for example, where two-bedroom apartments sell for up to 4 million dirhams.

"There's a squeeze on middle-income earners," said Faisal Durrani, head of research at property consultancy Cluttons.

"Affordability issues are likely to become more acute."