Dubai, Abu Dhabi Firms To Hike Housing Allowances In 2014

The majority of workers in Abu Dhabi and Dubai will see a rise in their housing allowances this year, a new survey has found.

According to a poll conducted by human resources consultant Mercer, around 22 per cent of Abu Dhabi employees and 33 per cent of Dubai employees can expect to receive a housing allowance increase in 2014.

Out of 147 companies surveyed, 24 per cent of the companies in Abu Dhabi and 41 per cent of Dubai firms said that they will raise the housing allowances for their employees this year.

The majority of respondents from the capital said that around 91 per cent of their workforce would benefit from this move while Dubai-based firms said that about 82 per cent of their employees would benefit.

“I would venture that the well-reported rise in Dubai rents is the reason why companies are considering an increase,” said Nuno Gomes, information solutions business leader Middle East, Mercer.

“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.

“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,” said Gomes.

Around 15 per cent of the Abu Dhabi companies and 25 per cent of Dubai firms were found to have hiked housing allowances in 2013, the survey said.

“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.

The cost of living in the UAE has risen sharply in the last few months.

Dubai’s inflation rate edged up by 2.17 per cent in January, mainly driven by housing and other utility costs. Abu Dhabi experienced a 2.1 per cent year-on-year increase in consumer prices last month.