Abu Dhabi firms inform staff of non-renewal of their rental contracts in Dubai

Companies in Abu Dhabi have begun informing employees, who have been provided accommodation in Dubai, of non-renewal of their rental contracts after they expire.

“I have been provided accommodation in Dubai by my company, but few weeks back I was told by my HR department that my rental contract would not be renewed when it expires in January,” an employee of a semi-government company said on conditions of anonymity.

“It was not just me but all those who stay in Dubai were informed of the decision to move to Abu Dhabi once their rent contracts expire.”

In September, WAM news agency, citing the emirate’s Secretariat General of the Executive Council, said that Abu Dhabi government employees would be required to live inside the capital within a year.

The decision was made to ensure the safety of employees commuting long distances, often in bad weather conditions, the council said. As many as 19,564 people drive into Abu Dhabi in the morning hours.

Real estate agents believe that rents in Dubai will not be impacted as Abu Dhabi government employees have been given a year to move to capital.

Bank of America Merrill Lynch has predicted that Dubai’s active population should grow by 6.1 per cent on average over the next eight years, faster than residential supply, which is set to grow by 4.9 per cent over the next two years. As of December 10, 2012, Dubai Statistics Centre puts population of the emirate at 2.09 million.

Oversupply in the residential sector too has been ruled out with CB Richard Ellis expecting on average 12,000 new residential units to be delivered per year over the next three years.

Loshini Lawrence, Operations Manager, Abu Dhabi Office, Better Homes, told this website earlier that some families were saving up to Dh80,000 to Dh100,000 per annum on their housing costs by living in Dubai.

Jones Lang LaSalle, in a statement issued yesterday, said: “Whilst supply continues to increase as major projects reach completion, vacancy rates are set to rise further and consequently rental values have continued to decline throughout 2012.”

The global consultancy added that the market prospects for 2013 will be dependent upon the impact of two recent regulatory announcements: registration of all existing leases in the Tawthaaq system, restrict sharing accommodation and encouraging government employees to live in Abu Dhabi to qualify for housing allowances.

ALSO READ:

Public auction: Downtown Dubai property sold for double the base price

Abu Dhabi hitch-hikers get taken for ride

Top 13 destinations for 2013 are Dubai and...

Follow Emirates 24|7 on Google News.