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25 June 2024

Housing allowance hike this year

By Staff

Over a quarter of all workers in Abu Dhabi and Dubai look set to receive housing allowance increases in the coming year, according to a survey conducted by global human resources consultants, Mercer.

The company has just published the findings of its ‘Spot Survey on Housing Allowance Increase in UAE,’ with 147 organisations in the two emirates polled for their employee benefit intentions over the next 12 months.

According to the responses received, 24 per cent of companies in Abu Dhabi intend to raise the housing allowance for their employees this year, with 41 per cent of companies in Dubai reporting the same aim.

Of the 90 companies responding to an enquiry about which employees would qualify, those in the capital indicated that 91 per cent of their workforce would benefit, with Dubai-based organisations saying that it would apply to 82 per cent of their employees. The figures suggest that 22 per cent of workers in Abu Dhabi and 33 per cent of those in Dubai can expect a housing allowance increase this year – 28 per cent of employees in the two emirates combined.

"Our Spot Survey on Housing Allowance Increase in UAE revealed some interesting employee housing allowance intentions from the companies that participated,” said Nuno Gomes, Information Solutions Business Leader Middle East, Mercer. “Almost one in four workers in Abu Dhabi look set to receive a rise in their accommodation allowance, with one in three Dubai employees likely to receive an increase. I would venture that the well-reported rise in Dubai rents is the reason why companies there are considering an increase. Rental rates in Abu Dhabi have remained stable in comparison, at least for the past 12 to 18 months, so organisations in the capital are not under the same pressure to raise their housing allowance,” he added.   

The average forecasted increase for 2014 across organisations that are planning to increase their housing allowances is 9.8 per cent in Dubai and 9.5 per cent in Abu Dhabi.

“Although various reports point to steep rental increases in Dubai over the last two years, at rates of 15 to 30 per cent per year depending on the locations, organisations are still reacting moderately and cautiously to these market increases,” commented Gomes.

The Mercer survey also revealed the housing allowance rises made in 2013 by the organisations taking part. Last year saw 15 per cent of the Abu Dhabi companies giving increases, with 25 per cent of those in Dubai raising their accommodation remuneration.

The Spot Survey on Housing Allowance Increase in UAE polled organisations across the industry sectors. The largest single category participating was High-Tech (17 per cent), followed by Energy (16 per cent), services (15 per cent), Consumer Goods (11 per cent), Financial Services (nine per cent), Life Sciences (seven per cent) and Durable (two per cent). The Other category made up 23 per cent.

“It is clear from our survey that there are numerous companies from across the industry sectors who are considering raising the housing allowance for their employees over the forthcoming 12 months, with the level of these rises greater than those awarded in 2013, and the highest since the 2009 meltdown,” said Gomes. “Organisations in the UAE are now starting to face issues attracting and retaining talent due to the rise in living costs across the country, with the higher rental increases seen in Dubai leading to the city’s Expo 2020 win,” he added.