Population growth in Dubai

How will a rise to 2m-plus affect your rent and wages?

Area Guides
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At the end of last year, the number of people living in Dubai clocked in at a little more than two million – a landmark figure for the emirate – while estimates from Qatar suggest the population of the entire GCC will approach 50 million by 2013. According to the Qatari report, by QNB Capital, the Gulf’s population rise is thanks to a steady inflow of expatriates and a growth in the number of Gulf nationals because of an increase in birth rates and life expectancies.

What does this mean for you? If you’ve lived here for longer than a year or two, you might have already noticed Dubai is much busier these days, something we’ve been alerted to by a bigger squeeze in metro carriages, an even longer wait for taxis and growing pools of congestion on the roads. But is it really bad news? Should you be worried about your rent going up, or your wages going down? It would seem the answer to all of those questions is no.

‘Ordinarily, that [population growth] would lead to shortages of real estate and properties, and that would push up rents and property prices in general,’ explains Liz Martins, senior economist at HSBC in Dubai. ‘But Dubai still has quite an over-supplied real-estate market. Prices aren’t still falling, but there isn’t a lot of pressure on them to rise. I think Dubai can accommodate the population growth, because all it means is more demand for what we already have.’

Another piece of potential good news is that these new arrivals are probably not after your job. While more people usually means a bigger pool of candidates for a job, Martins says Dubai’s situation is unique in this sense. ‘If it was organic population growth like you have in Egypt, where the population is growing because people are having more kids, there are more people and the same amount of jobs, so you’re going to work for lower wages because there is more supply than demand for labour,’ she explains. ‘Here, it’s different, because if the population goes up it’s probably because people are migrating into Dubai.’ Of course, residents can’t get a visa unless they have a job lined up, or a partner or parent with a job.

If the growth is occurring in a section of the population with more disposable income (which the Dubai Statistics Center hasn’t revealed), Martin explains that this could see prices for day-to-day products increase. ‘This won’t happen with things like taxis, because they’re very regulated and fuel is cheap, but if the population is growing in a segment that does go out and spend, that pushes prices up for everyone,’ she says. However, she hints that an increase wouldn’t be dramatic enough to cause serious concern, as Dubai is still seen to be recovering, rather than booming. That said, you may find it harder to get a table at your favourite restaurant – which may mean you may have to sacrifice a little of your spontaneity. As much as we’d like to apologise to the commitment-phobes out there, it’s really a small price to pay against the notion of rents creeping back up.

‘If the population is growing it’s because the economy is picking up, and we’re bringing more people in to do the work that needs to be done here, which is a good sign,’ Martins concludes. After a wobbly few years around the world, if a busier commute is a sign that things are looking up for Dubai, we’ll happily stop grumbling and squash closer together on the metro. Though we still wouldn’t object to a few more taxis on the roads at 6pm. Just saying…

For more Dubai-related statistics and to keep an eye on the ‘Population Clock’ for yourself, visit www.dsc.gov.ae

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