Rent in the UAE has hit a record high due to economic growth and a sharp shortage in housing supply, an official said yesterday.
Although housing prices have reached an alarming level, there will be no let up in the near future unless balance is restored to the market through the construction of more houses, said Falah Al Ahbabi, Director-General of the Urban Planning Council, which is supervising Abu Dhabi’s long-term development plan.
Speaking during a Q&A session at the Abu Dhabi Economic Forum, which ended yesterday, Al Ahbabi said the surge in demand for housing was a natural result of high growth in the country’s
“The economy of the UAE and other world economies are developing fast and this economic upsurge has created a demand-supply imbalance in the housing sector. The rising prices of building materials has also pushed up rents sharply.”
Al Ahbabi said the surge in rents has been one of the main drivers of rising inflation in the UAE and other Gulf states.
The director-general provided no figures for inflation, but according to the Central Bank, it has ranged between seven to 12 per cent over the past five years. Rents recorded the highest rise in the consumer index, standing at nearly 15 per cent.
“Inflation takes some time but eventually it comes under control as authorities move to take action to tackle the problem.
“I believe that when supply begins to climb and catches up with demand, the rise in housing prices will slow down and it will return to normal. Until then, I see a constant rise in property prices and rents,” he added.
Growth drives Capital rents up