Abu Dhabi rents skyrocket: Is the dream ending?
Yesterday I spent two hours after work helping a colleague and friend move from her apartment, that had been condemned by the Abu Dhabi Municipality for having been a villa illegally subdivided into apartments, to a much, much more expensive flat.
She has gone from paying Dh80,000 a year ($21,9717 a year, or $1,826 a month) to Dh150,000 a year ($41, 095 a year, or $3,424 a month) for a place that is much smaller than what she was living in. She accepted that price because it was fully furnished (sofas, dining table, chairs, refrigerator, stove, microwave and bed) and because there was nothing else decent available for less unless unfurnished. Similar unfurnished 1-bedroom apartments in Abu Dhabi are going for Dh120,000 to Dh130,000 a year.
That was not the case just a year ago. Then you could get a one-bedroom flat for Dh80,000 a year in a brand new building, or slightly less in an older building. But then the owners of buildings suddenly realized that the huge numbers of professional and middle class expatriates pouring into the UAE’s capital were desperate for housing, and couldn’t help themselves from turning into greedy opportunists.
Sometime soon after the astronomic rise in rents in Abu Dhabi, we newcomers to this city realized that there was a local regulation that capped annual rent hikes to no more than 5 percent a year for current tenants. That was good news for those of us already in housing at the old prices. It was tough luck for those who moved here too late.
It’s a shame really that the authorities are seemingly doing too little to address the housing crunch that so many people are facing in Abu Dhabi. Many people have been forced to leave or not come here in the first place because of the dearth of affordable housing.
The current mantra that everyone seems to be repeating is that when all of the luxury apartment towers are ready on Reem Island in 2010, then wealthier people will move out of downtown locations to Reem Island, thus freeing up those older apartments for the middle class folk currently being squeezed out of the market. Somehow, I find it hard to believe that things will work out in such a simplistic fashion.
The problem is that there does not seem to be a huge rush to build decent, affordable housing. Instead, and depressingly as I found out when I went apartment hunting with my friend last Saturday, there is an obscene rush by owners of old villas to turn them into illegally subdivided apartments.
“Where is the front door?” I asked the real estate agent who was showing us a villa being hastily subdivided into flats.
“Oh, don’t worry, it’s going to go here,” he said, motioning with hands at an entrance way that opened directly into the stairwell.
My friend and I rolled our eyes at each other, saying “right!” under our breaths. Later, I told my friend that she shouldn’t accept to live in another illegally subdivided flat because the municipal inspectors would probably be there before she could say “gotcha!”
Meanwhile, after recovering from the real fear of being thrown out onto the street and becoming homeless, my friend is trying to figure out how she’s going to survive on a severely diminished paycheck. So much for the Abu Dhabi dream.