Rents will drive away expats, says report

UAE, 12 Apr 2005

Dubai: Rents in the UAE have increased 17 times faster than salaries in the past year, according to a new report.

Many expatriates are looking to leave the country as soaring accommodation costs eat into their income, according to the study by GulfTalent, an online recruitment service.

Increasing numbers of people are set to move out of Dubai into areas where rents are less costly, the study predicts. Families are being broken up because hard-pressed employees can no longer afford to keep relatives in the UAE.

The poll comes as a concern for private sector workers, who have seen their pay increase little while public sector staff have just been awarded 15 or 25 per cent pay rises a move likely to fuel inflation, observers said.

Rents increased by an average of 26 per cent over the past 12 months, according to the survey of about 500 professionals.

This compares with an average salary rise of a mere 1.5 per cent, with most staff saying their wage had not gone up at all. This means rents have gone up 17.3 times faster than salaries.

One-fifth of people said they were hoping to switch jobs to earn more money, while 15 per cent said they would be asking for a pay raise.

"Other options included cutting personal spending, leaving the UAE and getting a job in another country," said the report, titled The UAE rent inflation and impact on the job market.

Some respondents said they would try to negotiate a discount on rent or move to another emirate, with Dubai residents hoping to relocate to Sharjah and those already in Sharjah looking to move to Ajman.

The survey found that expatriates were considering sending their families back to their home country since they could no longer afford to keep them in the UAE.

Other workers are being forced to look for a second part-time job in a bid to make ends meet.

Rent now makes up 32 per cent of an individual's salary, compared with 26 per cent this time last year.

"So far, most employers have seen little need to raise salaries, given the apparently limitless supply of new expatriates willing to work at existing rates, particularly in Dubai," the study found.

"As a result, many more people than before are looking to switch jobs as a possible way to raise their income and maintain their standards of living."