Sixty per cent of the average family’s budget in Abu Dhabi is spent on paying the rent, according to a high-ranking official at the Department of Planning and Economy in the capital.
Butti Ahmed Al Qubaisi, assistant undersecretary at the department, said high rent was the biggest factor contributing to inflation, which stood at 10.7 per cent in 2007. And in a statement to Emirates Business, Al Qubaisi said the decision by the Abu Dhabi Executive Council to reduce annual rent increase rates from seven per cent to five per cent had not been able to check inflation.
The demand for residential units in Abu Dhabi is still very high, while their supply lags behind, he added.
“A study by the department on behalf of the Abu Dhabi Executive Council showed increasing rents were responsible for 60 per cent of the increase in inflation. The other contributors were high food prices and petrol and diesel prices, which accounted for 18 per cent and 15 per cent, respectively,” said Al Qubaisi.
About 80 per cent of people benefiting from high rents in Abu Dhabi are high net worth individuals who already earn high incomes, Al Qubaisi revealed. Property developers should concentrate more on building affordable residences for middle-income people, he said, as such properties constituted only 20 per cent of all developments in the emirate.
Meanwhile, the Department of Planning and Economy in Abu Dhabi announced a new weekly report for the media, which will be launched next week.
It will provide analysis on the most significant economic issues in the emirate.
Rent takes 60% of budget