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UAE professionals may seek alternatives due to rising rent
- September 16, 2005, 3:40 am
Rapidly rising rents aggravated by poor salary raises may cause professionals to seek employment in new and higher paying jobs, causing major shifts in the job market, according to an online survey.
A website says the 500 professionals who participated in the survey identified steep increases in rents as their number one concern.
The survey suggests on average, across the UAE, rents increased by 26 per cent over last year.
Dubai was first with a 27 per cent increase, Sharjah second with 25 per cent and Abu Dhabi third at 23 per cent.
Increases varied according to place and type of accommodation.
Room rents faced higher rate increases compared to apartment rents due to much stronger demand and low supply. However, within the apartment sector those in the lower range rose by steeper ratios.
Apartment rents in the Dh10,000 to Dh20,000 range increased by about 34 per cent while those in the Dh30,000 to Dh40,000 range saw only an average 19 per cent rise.
Normally the rise in rents may not be of great concern, but combined with poor salary increases the survey suggests, the result will be “a substantial fall in net disposable income which is translating into major shifts in employment patterns.”
Salaries averaged a mere 1.5 per cent increase across the board, and public sector employees received the highest increases, but most surveyed said they got no raise at all.
Based on the outcome of the survey GulfTalent.com forecasts “an increased turnover in the job market over the coming months, especially in the senior and executive level.”
So what is the solution? The number one response by participants is to change jobs. Another popular option is simply to try to negotiate a salary increase with the current employer.
Other alternatives included moving to cheaper accommodation, dipping into savings and even getting a second job.
There was a significant difference in the responses from men and women. The majority of men chose changing jobs as the only solution to the rent problem, while women chose to reduce their spending before leaving their current employer.
According to the report released by the online survey most employers have no intention of increasing salaries due to the perception that there is an “apparently limitless supply of fresh expatriates willing to work at existing rates, particularly in Dubai.”
The implications for the business sector could be grim, as the drive to cut spending has prompted many people to delay repayment of their loans.
For the local banking sector this may have a dire affect on the retail credit quality as well as the prospect of higher default rates over the next year.
Source - Gulf News
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