Greetings,
I think all of us that live and/or work in AUH know the current challenges over find accomodation. I thought we might get a discussion going about how this has or may effect your business.
Has your company had to significantly adjust either housing or salary packages to attract candidates?
Where are you finding housing?
Are you giving lump sum and expecting the candidate to figure out housing on their own?
Does your company provide any mechanism like interest free loan from the organization to meet the one year rent upfront obligation?
Is all this effecting recruitment and retention rates?
Are many of your employees leaving off the island and commuting far distances? ( ie, from dubai, or al ain or outlying areas).
I think many of us would benefit form knowing how the majority of us are coping with this from a people and organizational perspective here in the Capital.
Cheers
Bruncha
From United Arab Emirates, Dubai
7I think all of us that live and/or work in AUH know the current challenges over find accomodation. I thought we might get a discussion going about how this has or may effect your business.
Has your company had to significantly adjust either housing or salary packages to attract candidates?
Where are you finding housing?
Are you giving lump sum and expecting the candidate to figure out housing on their own?
Does your company provide any mechanism like interest free loan from the organization to meet the one year rent upfront obligation?
Is all this effecting recruitment and retention rates?
Are many of your employees leaving off the island and commuting far distances? ( ie, from dubai, or al ain or outlying areas).
I think many of us would benefit form knowing how the majority of us are coping with this from a people and organizational perspective here in the Capital.
Cheers
Bruncha
From United Arab Emirates, Dubai
Bruncha,
I waited for sufficient time to see whether we get to see responses here. Here goes my side of story to our sorrows:
Has your company had to significantly adjust either housing or salary packages to attract candidates?
In the financial year starting 2007 and forward, it is a reality that real estate / rental prices have increased substantially high in the capital, almost racing neck to neck or ahead of other cities. Accordingly, accommodation allowances had to be revised / re-adjusted for all categories more than one time.
Where are you finding housing?
Right now, it is case by case basis, wherever there is availability it is grabbed and made sure, when people exit (mostly we have many 2-3 year contact / rotational staff), those houses/flats/villas are retained for the new comers. Gradually, the search and reachability have extended all the way from the city to the newly developed mini townships on way on Airport Road, near Sheikh Zayed Mosque, Khalifa City or even extensions on Airport and Tariff Road.
Are you giving lump sum and expecting the candidate to figure out housing on their own?
It again depend on grade, category and several other factors and contracts. Senior staff / managers are given options of houses/villas already located/finalised whereas in middle management and local contract cases, lump sum payments are given. Some others are given options to find on their own.
Does your company provide any mechanism like interest free loan from the organization to meet the one year rent upfront obligation?
Not really. No loan facility. Based on grades/categories either options of selecting houses where the rent is paid upfront by the company.
Is all this effecting recruitment and retention rates?
Rental payments eats up a major share of the salary part currently. So, obviously it is a major attraction for employees when they search/opt for new employments. Therefore it is proving to be a major factor for the above two.
Are many of your employees leaving off the island and commuting far distances? ( ie, from dubai, or al ain or outlying areas).
Previously, what was far was Khalidiya, Buteen, Karama, and little ahead, now has become Mussaffah, and even far away upto Shahama, and mini townships on Tariff highway. Dubai is not at all an option for Abu Dhabi employees, but I have known cases of expats moving to Ras Al Khaimah and driving down daily. I also know many cases of locals who drive down from Ras Al Khaimah or other Emirates. If you notice the early traffic on the Abu Dhabi / Dubai highway you will realise the scenario more clearly. What was a supposed to be an isolated drive in the early morning hours at 6:00 am from Abu Dhabi to Dubai one year ago with one or two cars here and there has become a 4 line almost bumper to bumper drive back and forth to reach offices in Dubai and Abu Dhabi.
I hope I have been able to give you a bit of knowledge and experience in this regard and keep the discussion open for others to share their inputs.
The following articles will also give you a basis to work your own conclusions to what is in store for us:
Team 1 Dubai : Your e-Home for TQM & Positive Thinking: Abu Dhabi outpaces Dubai in housing costs and rentals
<link outdated-removed>
In the second link above, experts have estimated Oil price increase in 2008 to $ 100 per barrel and see the realistic price which is running now which has de-railed all planning and estimate for belling the escalation of Cost of living to be in line with the affordable remuneration packages that can be offered to employees. It is a global problem and not restricted to Abu Dhabi/UAE alone.
Therefore it is really a matter of importance now and more in the coming time.
Regards,
Ramesh Menon
From United Arab Emirates, Abu Dhabi
I waited for sufficient time to see whether we get to see responses here. Here goes my side of story to our sorrows:
Has your company had to significantly adjust either housing or salary packages to attract candidates?
In the financial year starting 2007 and forward, it is a reality that real estate / rental prices have increased substantially high in the capital, almost racing neck to neck or ahead of other cities. Accordingly, accommodation allowances had to be revised / re-adjusted for all categories more than one time.
Where are you finding housing?
Right now, it is case by case basis, wherever there is availability it is grabbed and made sure, when people exit (mostly we have many 2-3 year contact / rotational staff), those houses/flats/villas are retained for the new comers. Gradually, the search and reachability have extended all the way from the city to the newly developed mini townships on way on Airport Road, near Sheikh Zayed Mosque, Khalifa City or even extensions on Airport and Tariff Road.
Are you giving lump sum and expecting the candidate to figure out housing on their own?
It again depend on grade, category and several other factors and contracts. Senior staff / managers are given options of houses/villas already located/finalised whereas in middle management and local contract cases, lump sum payments are given. Some others are given options to find on their own.
Does your company provide any mechanism like interest free loan from the organization to meet the one year rent upfront obligation?
Not really. No loan facility. Based on grades/categories either options of selecting houses where the rent is paid upfront by the company.
Is all this effecting recruitment and retention rates?
Rental payments eats up a major share of the salary part currently. So, obviously it is a major attraction for employees when they search/opt for new employments. Therefore it is proving to be a major factor for the above two.
Are many of your employees leaving off the island and commuting far distances? ( ie, from dubai, or al ain or outlying areas).
Previously, what was far was Khalidiya, Buteen, Karama, and little ahead, now has become Mussaffah, and even far away upto Shahama, and mini townships on Tariff highway. Dubai is not at all an option for Abu Dhabi employees, but I have known cases of expats moving to Ras Al Khaimah and driving down daily. I also know many cases of locals who drive down from Ras Al Khaimah or other Emirates. If you notice the early traffic on the Abu Dhabi / Dubai highway you will realise the scenario more clearly. What was a supposed to be an isolated drive in the early morning hours at 6:00 am from Abu Dhabi to Dubai one year ago with one or two cars here and there has become a 4 line almost bumper to bumper drive back and forth to reach offices in Dubai and Abu Dhabi.
I hope I have been able to give you a bit of knowledge and experience in this regard and keep the discussion open for others to share their inputs.
The following articles will also give you a basis to work your own conclusions to what is in store for us:
Team 1 Dubai : Your e-Home for TQM & Positive Thinking: Abu Dhabi outpaces Dubai in housing costs and rentals
<link outdated-removed>
In the second link above, experts have estimated Oil price increase in 2008 to $ 100 per barrel and see the realistic price which is running now which has de-railed all planning and estimate for belling the escalation of Cost of living to be in line with the affordable remuneration packages that can be offered to employees. It is a global problem and not restricted to Abu Dhabi/UAE alone.
Therefore it is really a matter of importance now and more in the coming time.
Regards,
Ramesh Menon
From United Arab Emirates, Abu Dhabi
At present there is an acute shortage of quality accommodation, specially in Abu Dhabi and affordable price ranges and there have been significant increases in rents since last years
the average rent (June 2006) of a one-bed-room apartment in the capital is Dh53,000, two-bed-room apartments are Dh76,000 and three-bed-room apartments are Dh127,000. From June 2005 to June 2006, rents have increased by 33 per cent for single-bedroom apartments, 23 per cent for two bedrooms and 30 per cent for three bedroom( Asteco).
I think the authorities have to impose a cap on rental increases because owners are aware of the high demand for residences, and another reason for rent hike is real estate lobby
From United Arab Emirates, Abu Dhabi
the average rent (June 2006) of a one-bed-room apartment in the capital is Dh53,000, two-bed-room apartments are Dh76,000 and three-bed-room apartments are Dh127,000. From June 2005 to June 2006, rents have increased by 33 per cent for single-bedroom apartments, 23 per cent for two bedrooms and 30 per cent for three bedroom( Asteco).
I think the authorities have to impose a cap on rental increases because owners are aware of the high demand for residences, and another reason for rent hike is real estate lobby
From United Arab Emirates, Abu Dhabi
My colleagues are reporting that one bedrooms in good buildings now at 100K...3 beds...close to 180 in manasir areas..
I know people who work for the govt who drive from Al Ain every day.
A close friend just rented a flat in al rahba.
Many flats are in villas, and that may be ok for private firms, but it appears that govt employees must provide drawing and AUH muncipality docs for the new construction. It means that if a flat was from a villa, without permissions...then you could be in for some interesting times.
Rumor is circulating that there will be a "No increase" decree for 2008.... I guess will see.
Cheers
From United Arab Emirates, Dubai
I know people who work for the govt who drive from Al Ain every day.
A close friend just rented a flat in al rahba.
Many flats are in villas, and that may be ok for private firms, but it appears that govt employees must provide drawing and AUH muncipality docs for the new construction. It means that if a flat was from a villa, without permissions...then you could be in for some interesting times.
Rumor is circulating that there will be a "No increase" decree for 2008.... I guess will see.
Cheers
From United Arab Emirates, Dubai
Hi Guys.
I just happened to go through all the posts above.
I have one small suggestion that might be worth your while in following up. The situation there may be different form what prevails in Mumbai, but here goes.
The demand-supply situation there is artificially trumped up where the actual users are far less than the number of units coming up in market each year. But the trading is rampant and coupled with rising costs the accomodation is bound to get costlier.
Just get in touch with all the big names developing in your area. Put forth your requirements of rental accomodations required and the number of years you think the same would sustain. Each Developer would have a huge database of investors who would like to hold on to their properties/would not have been able to offload the properties due to market conditions. You'd stand a good chance negotiating bulk rentals with them.
Mind you, this is ONLY if you guys rent a sizable number of units. The concept of REITs i.e. Real Estate Investmnent Trusts is definitely catching on in Asian as well as Middle Eastern places hence there are a lot of Developers creating Assets for selling off lock, stock & barrel to pension funds/REITs at a later date. The model is not very complex and works well for everone cause in many countries people get only 2-4% returns on investment per annum. Hence they invest in limited funds/REITs dealing with properties to get a better upside, cause hey, Real Estate still is the safest investment!!
Best regards.
From India, Mumbai
I just happened to go through all the posts above.
I have one small suggestion that might be worth your while in following up. The situation there may be different form what prevails in Mumbai, but here goes.
The demand-supply situation there is artificially trumped up where the actual users are far less than the number of units coming up in market each year. But the trading is rampant and coupled with rising costs the accomodation is bound to get costlier.
Just get in touch with all the big names developing in your area. Put forth your requirements of rental accomodations required and the number of years you think the same would sustain. Each Developer would have a huge database of investors who would like to hold on to their properties/would not have been able to offload the properties due to market conditions. You'd stand a good chance negotiating bulk rentals with them.
Mind you, this is ONLY if you guys rent a sizable number of units. The concept of REITs i.e. Real Estate Investmnent Trusts is definitely catching on in Asian as well as Middle Eastern places hence there are a lot of Developers creating Assets for selling off lock, stock & barrel to pension funds/REITs at a later date. The model is not very complex and works well for everone cause in many countries people get only 2-4% returns on investment per annum. Hence they invest in limited funds/REITs dealing with properties to get a better upside, cause hey, Real Estate still is the safest investment!!
Best regards.
From India, Mumbai
Addressing this questions "Does your company provide any mechanism like interest free loan from the organization to meet the one year rent upfront obligation?"
Aren't companies giving employees their HRA in advance of three months atleast? Ours does. More often than not the house rent has to be paid up in 4 installments. Three months or one quarter's HRA is paid out in advance and deducted on a monthly basis. This has helped a great deal.
From United Arab Emirates, Dubai
Aren't companies giving employees their HRA in advance of three months atleast? Ours does. More often than not the house rent has to be paid up in 4 installments. Three months or one quarter's HRA is paid out in advance and deducted on a monthly basis. This has helped a great deal.
From United Arab Emirates, Dubai
Dear Abl,
Some companies do give HRA in advance as stated by you for a period of 3-24 months and this HRA is not paid to them until that period.
Now coming to the point of interest free loan,at a certain point companies used to do that but now because of various issues/malpractices they have stopped. This effects the cash flow of the company if they continue to offer interest free loans.
Sometimes a small amount can be given to an employee(on special recommendations) and deducted in 6 months. But this happens only in certain or special cases. Once again this solely depends upon the management to give it or not.
From United Arab Emirates, Dubai
Some companies do give HRA in advance as stated by you for a period of 3-24 months and this HRA is not paid to them until that period.
Now coming to the point of interest free loan,at a certain point companies used to do that but now because of various issues/malpractices they have stopped. This effects the cash flow of the company if they continue to offer interest free loans.
Sometimes a small amount can be given to an employee(on special recommendations) and deducted in 6 months. But this happens only in certain or special cases. Once again this solely depends upon the management to give it or not.
From United Arab Emirates, Dubai
Hi again,
My interest in how the private sector is handling this stems from some knowledge of western expat professionals who have been caught ill-prepared to pay 150, 000 and upwards for accomodation up front, when their contract is lump sum. Most people I know dont come with a year 's rent in their hand, since we simply dont work that way back home. At most we would expect a deposit and 1st and last month's rent, not the ENTIRE year in one go.
Furthermore, you cant get a loan from a bank until you have had salary deposits, and often times that doesnt happen until after you temporary housing ( hotel apt) agreement has been exhausted.
It has made several expats I know think 2x about the challenges of coming to the UAE, and caused tremendous stress on an individual who is trying to adapt, adjust, and be productive in the first few weeks.
There has to be a better way...
From United Arab Emirates, Dubai
My interest in how the private sector is handling this stems from some knowledge of western expat professionals who have been caught ill-prepared to pay 150, 000 and upwards for accomodation up front, when their contract is lump sum. Most people I know dont come with a year 's rent in their hand, since we simply dont work that way back home. At most we would expect a deposit and 1st and last month's rent, not the ENTIRE year in one go.
Furthermore, you cant get a loan from a bank until you have had salary deposits, and often times that doesnt happen until after you temporary housing ( hotel apt) agreement has been exhausted.
It has made several expats I know think 2x about the challenges of coming to the UAE, and caused tremendous stress on an individual who is trying to adapt, adjust, and be productive in the first few weeks.
There has to be a better way...
From United Arab Emirates, Dubai
More often than not the house rent has to be paid up in 4 installments. Three months or one quarter's HRA is paid out in advance and deducted on a monthly basis. This has helped a great deal. [/quote]
Most people I come into contact with have to pay the entire amount up front, or at best 2 payments.
From United Arab Emirates, Dubai
Most people I come into contact with have to pay the entire amount up front, or at best 2 payments.
From United Arab Emirates, Dubai
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