ABU DHABI Spiralling rents are forcing Abu Dhabi residents to downsize their living space.
Unable to afford the increase, many tenants are settling for smaller apartments or moving to cheaper areas.
Italian expat Mia Alfonso, 23, said she moved to a Dh75,000 studio apartment in Reem Island last month after the rent of her one-bedroom apartment in the Corniche area was hiked to Dh110,000 from Dh90,000.
“I had no choice as there was no way I could have afforded the increase,” she said.
A similar predicament now faces British design consultant Nelson whose tenancy contract expires in August. In the last two years, the rent of his one bedroom home Reem Island has been increased by 14 per cent and now his landlord is asking for another Dh8,000 to renew it.
“This is way too high. I would rather move to a studio,” he said.
“I do not want to move out of Reem Island because it is close to the city. But the problem is that I can’t find a one bedroom here for anything less than Dh100,000. Studios suit my budget as their rents range from Dh75,000 and Dh80,000,” he added.
Rents in Abu Dhabi have been surging since the removal of the five per cent rent cap in November 2013, but it’s only now that the full impact of the move is being felt.
Ask real estate agents. Many confirmed people are moving to low-rent properties following arbitrary hikes by landlords. “Most clients who approach us want cheap units. And the trend of moving homes to avoid rent increases is evident across all localities in Abu Dhabi,” said S.H, an agent with Property Shop Investment.
Barsha Shaikh of Gravity Real Estate also acknowledged the growing demand for cheap accommodation.
“People are definitely looking for cheaper options because rents are on the rise everywhere. Many are willing to relocate to Mussafah or Mohammad Bin Zayed City. Those who cannot, ask us to find studios,” said Shaikh.
All doors closed
But downsizing is not an option for everyone, particularly those with families. A case in point is that of Indian expat Ramesh Nair who pays Dh72,000 for a two bedroom Musaffah apartment where he lives with his wife and teenage son.
Served with a Dh15,000 rent hike notice, Nair is yet to figure out his next step.
“Three years ago I moved from the city to Mussafah to save on rents. But where do I go now? It’s is hard to find a cheaper option because no matter where you go, the rent demon will eventutally catch up with you,” said Nair who works for an engineering firm.
Nair said if the rent cap is not brought back, people like him will be forced to send their families back home or move to shared apartments or villas.
Ben Crompton, Managing Partner at Crompton Partners Estate Agents, said the third quarter of 2015 will witness more aggressive rent increases.
“It is during summer new families will be moving into Abu Dhabi, and that will cause a spike in demand for housing units. So we are looking at another three to five per cent increase in rents,” Crompton told XPRESS.
He said the upward spiral is likely to continue next year as well because oil prices have not affected recruitment drives, and the new supplies of housing units are limited and will fall short of demand.
YOUSPEAK: Have you moved to a smaller home because of rising rent?
