Monday, November 25, 2013

Residents concerned over rent cap removal in Abu Dhabi

Latest decision by the Abu Dhabi government to remove the annual rent cap limit, wherein yearly increases were limited to five percent, has caused great concern to residents, as several of them have to look for alternative accommodation in less ideal locations.

The resolution announced by the Abu Dhabi Executive Council, terminates the yearly rent increase and rent contract extensions from 10th November. Rents will now be determined by market forces, including the location and condition of the apartments.

However, residents are of the opinion that the decision will not benefit them and has caused concern. Residents are of the opinion that a five percent increase in rent annually can be affordable, but, if the rent increases more next year, they have no alternative, except look for cheaper accommodations, as salaries do not rise to keep pace with rent increases.

The problem sometimes gets doubled by the fact that people working in public firms are offered generous housing allowances.

Residents in the capital have been long worried about rentals, as the rates are too high, particularly in the city centre. Heavy traffic to and from suburbs during peak hours also deters several residents from relocating to external area such as Shaham and Musaffah.

The five percent rent cap was a mainstay of Abu Dhabi accommodation over the past few years, as it made it possible for residents to live near the city centre.

According to a Filipina store Manager, living near Al Wahda Mall, the decision would compel more people to share apartments and live in crowded conditions, as not all are paid enough to be able to drive or afford a whole apartment in the city.

MPs have urged landlords and Governments to take into consideration living conditions for ordinary people before deciding to increase rents.

The latest report by real estate service provider Jones Lang LaSalle revealed that the demand for residential rental units was higher during the third quarter of the year. The demand was due to the requirement for all Abu Dhabi Government employees to live in Abu Dhabi, which has caused several families to relocate from Dubai.

Further, with rents on the rise, it is reducing price difference between Dubai and Abu Dhabi residential units, causing more people to stay in Abu Dhabi than before, the report said. 

1 comment:

Arab World Careers said...

This might cause a hit on people aspiring for jobs in Abu Dhabi & jobs in UAE