Despite the widespread belief that Abu Dhabi rents keep increasing, a new report shows they have begun to ease. MPM Properties, the real estate arm of Abu Dhabi Islamic Bank, found rents for high-end properties had increased by a muted 1 per cent during the last quarter.
However, the report also showed that while the increases have eased recently, over the course of the year they had still risen by between 7 and 10 per cent. Rents in Abu Dhabi continue to be among the highest in the world, with a previous MPM report in September showing it is second after London, with an average of $2,649 (Dh9,729). The 5 per cent rent cap in the capital was abolished in 2013 and last year, rents rose by an average of 12 per cent across the board. According to the CBRE’s Global Living Report, this was the world’s second highest increase.
All this has to be seen in the context of ongoing concerns about the increasing cost of living overall for groceries, school tuition fees and childcare.
The steady decrease in oil prices is affecting many companies’ profitability and, combined with flat pay grades, increases in the already high cost of accommodation are squeezing household budgets. Education is a particular concern for low-income families, who struggle to afford to send their children to schools offering high standards.
The MPM Properties report also confirmed the limited new supply of homes, with just over 1,250 new apartments made available in the same period, including 900 apartments in Gate Towers alone. Continuing high demand for affordable housing means prices in that sector are likely to rise, prompting some workers to leave because they cannot afford to live here.
The economy needs a range of workers to continue to grow, which is why issues like the cost of living are important. Oversight needs to be kept on the property market to ensure it remains in balance, so that the economy will continue to develop.
