Rising rents leave tenants in lurch

Residents in Abu Dhabi are facing a sudden rise in apartment rents due to what property dealers call a growing gap between demand and supply in the real estate industry.

Rents for apartments, according to dealers and tenants, have gone up between 10 to 50 per cent recently as a result of an increasing demand for accommodation and the shortage of properties.

There has been an increase in the rents of almost all the new and fairly new apartments managed by private real estate agencies as well as the Department of Social Services and Commercial Buildings.

Property dealers told Gulf News that the situation has been created due to a lack of new residential buildings coming up in the last three years.

"We have not seen any new residential blocks for several years. In fact, many old buildings are being demolished, further deteriorating the situation," said Abdul Salam of Motherland Property Management.

Mohammed Ali, Manager of Waves Property, echoed similar reasons, saying there is also a demand from property owners to increase the rents.

"There is no authority to control rents, it is just the market fluctuations that have triggered the hike. It is not in our hands. It is the building owner who demands a hike in rents."

Ali agreed that there is a shortage of apartments in Abu Dhabi and said it was for the same reasons as attributed by other property dealers. "The main problem is there are no new buildings coming up to meet the demand."

However, a top official from the Department of Social Services and Commercial Buildings told Gulf News that plans are underway to increase the number of properties in Abu Dhabi to meet the rising demand for apartments.

Ahmed Al Dhaheri, Assistant Undersecretary for Engineering Affairs at the department, commonly known as the Khalifa Committee, said officials are currently studying a proposal to increase the number of buildings and help apartment hunters.

But this would not necessarily help reduce rents and would simply make it easier for people to find flats of their choice.

"Rents have been raised because the availability of vacant flats has reduced over the past few years. This is an industry where the demand has increased while the availability of flats has reduced, so naturally some prices are going up," Al Dhaheri said.

He added that a recent project to increase the number of buildings would help cover the needs of the majority of apartment hunters. The number of studio and one-bedroom apartments will be increased under the planned project to meet the rising demand for these two categories.

Such ambitious projects notwithstanding, rising rents have forced many residents to give up their current dwellings and hunt for flats in the suburbs and remote areas of the city.

A number of people interviewed by Gulf News said the sudden increase has hurt their annual domestic budget as housing allowances from employers are simply too small to cover even 45 per cent of the rent they are paying.

K. Vasu, an Indian expatriate with two school-going children, said the rent for his two-bedroom apartment has shot up from Dh30,000 to Dh35,000.

"This is a sharp increase and the building is not new. It has few facilities to deserve such a jump. Now I'm hunting for an apartment that I can afford with my limited income."

He said he was forced to look elsewhere because the increase would affect his domestic budget as the cost of living had already risen with an increase in the price of petrol.

"There should be a long-term policy on rents. It is unreasonable to increase rents by 15 to 20 per cent in one go," he added.

Mohsen Al Badri, an Egyptian, had similar grievances. The rent of his two-bedroom flat in Khalidiya, about six years old, was increased by 20 per cent.

"I have been paying 32,000, but all of a sudden the rent has been increased to Dh38,000, which is making me look for a new flat. The increase is arbitrary and unjustified considering the condition of the building and the facilities available," he said.

Mahmood Al Rahman Siddiqui, another expat resident, said the rent of his one-bedroom flat has gone up by Dh4,000 to Dh24,000. He shares the flat with his wife and four school-going children, and was considering a move to a two-bedroom flat.

"I have been sharing my flat with a big family as my housing allowance is too meagre... I was in fact planning to move into a bigger apartment. But now it seems it is not possible as the rents are going up," Siddiqui said.