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Rents eat into Gulf salaries
Housing expenses across the Gulf continue to make the largest dent in regional salaries, forcing more and more people to share accommodation to make ends meet.
Qatar and the UAE have the highest rents in the region with a majority of 66% and 58% respectively paying more than $750 per month, according to a survey commissioned by job site Bayt.com. 26% of UAE residents pay above $1,250 per month, while this figure rises to 40% in Qatar.
The online survey, conducted by YouGovSiraj, questioned 8,500 respondents across the region on the financial implications of housing, utilities, car financing and company benefits.
Oman, Qatar and the UAE have experienced the largest rent hikes, with 42%, 32% and 23% of tenants shouldering increases of 20% or more.
The majority of Bahraini residents reported no increase at all, with just 9% experiencing a 20% rise or higher. Some 34% of Saudis say they experienced no increases.
Rabea Ataya, CEO of Bayt.com, said “Housing expenses have a huge bearing on the job market, particularly when it comes to salary requirements and relocation decisions. This survey reveals that rents are eating up ever-larger portions of people’s pay checks, a trend that could have implications for the economy as a whole”.
Around a third of Qatari and UAE residents said they shared accommodation with another family or individuals not from the same family. Kuwait, Bahrain and Oman reported 27%, 21% and 17%, respectively.
Nassim Ghrayeb, YouGovSiraj CEO, said: “This continued rise in the cost of living creates added pressure for smaller businesses and start-ups. It makes it much harder for companies to set up without significant capital which is detrimental to entrepreneurship, a key cornerstone to growth in the region. Small companies will also take the hit, making them less competitive and the ultimate conclusion of that is cash flow problems”.
Despite rising rents, the majority of respondents said they had not bought property. Some 88% of UAE respondents live in rented accommodation, compared to just 3% who owned their own homes. Kuwait and Qatar reported similar figures.
Bahrain is home to the largest number of buyers, where 11% of respondents own homes. It is closely followed by Oman at 10% and Saudi Arabia at 7%.
41% of Omani and 31% of Bahraini residents said it felt like a good time to buy, but that property was unaffordable at current prices.
Utility bills also amount to a significant percentage of expenses, the survey found. In Bahrain, 21% of respondents spend three to 5% of their monthly income on utilities, while just 13% said their monthly income covered both rent and utilities.
The cost of driving is not a major drain on income in the region, particularly in GCC countries. It is relatively high in the UAE, although this could be a function of commuting distances rather than the cost of fuel. 58% in the UAE spent less than $125 per month on fuel, with the figure even lower in other GCC countries. In Kuwait the figure was 88%.
Car financing plays a prominent role with 80% of Qatari residents choosing this option versus 76% in the UAE and 73% in Kuwait. Financing is less prevalent in Saudi Arabia and Bahrain at 48% and 51% of respondents respectively.
Car repayment rates are relatively low across the region with most respondents paying less than $500 per month. Fuel expenses are also low with the majority of respondents paying less than $75 per month.
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Posted by Elizabeth Robinson, Dubai, UAE on 8 November 2007 at 08:00 UAE time
This debate is going on since a long time.. but what is anybody doing about it???
One article comes, every two-three months, but no solution to it.. so why dont you just stop talking bout this... it wont make our burdens any less, by just writing about it!!
They say Action speaks louder than words!!!