Abu Dhabi inflation up by 3.4% in February

The cost of goods and ser­vices in the emirate of Abu Dhabi rose by 3.4 per cent year-on-year in February, boosted by a spike in housing and utility costs, according to Statistics Centre – Abu Dhabi. Housing, water and electricity shot up by 8.2 per cent last month compared to the same month the previous […]

The cost of goods and ser­vices in the emirate of Abu Dhabi rose by 3.4 per cent year-on-year in February, boosted by a spike in housing and utility costs, according to Statistics Centre – Abu Dhabi.

Housing, water and electricity shot up by 8.2 per cent last month compared to the same month the previous year, as the emirate’s rents continued to rise despite a slowdown in economic growth during which rental prices in the city of Abu Dhabi have cooled in recent months.

According to the real estate services broker CBRE, rents ended 2015 about 4 per cent higher than where they started the year, driven by rises for smaller, more affordable homes.

However, overall average housing rents in Abu Dhabi fell by 1 per cent during the three months to the end of December 2015 as landlords reduced prices for some larger and higher-­end apartment types.

Abu Dhabi scrapped its rent cap in 2013, which pinned rent increases for existing tenants to 5 per cent.

The move, which came at a time of an economic boom, helped to fuel rampant inflation in 2014 and led to CBRE ranking Abu Dhabi as the second-most expensive place to rent in the world last year, something that has prompted many tenants to up sticks to cheaper parts of town.

But the slump in oil prices has prompted the government to put some planned infrastructure projects on hold, precipitating a series of job cuts in the capital’s highly paid oil and gas, infrastructure, construction and services sectors, and reducing demand for rentals.

mkassem@thenational.ae

Follow The National’s Business section on Twitter

Source: Business

Leave a Reply

Your email address will not be published. Required fields are marked *