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Expert says Abu Dhabi tenancy rules could hit poor.

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Low-paid workers in Abu Dhabi could be hit hard by a change in law that will prevent more than three male tenants from sharing a room, according to one real estate expert.

Reports earlier this week stated that authorities in the UAE capital had begun raiding properties and warning landlords that non-compliance with the new rule could see them deprived of most government services.

One expert in the sector said that while it will be up to larger corporates operating in the emirate to absorb the cost of finding alternative accommodation for their staff, workers not employed by such firms could suffer as a result of the policy change.

"There is that lower end of the market - people who don't work for a corporate and have low salaries and low income, who have to share to be able to survive and have accommodation - those people are going to be hit fairly hard by it," said William Neill, associate director at Cluttons UAE.


The city's population, approximately 2m, is mostly made up of expatriate workers from Asia and the Subcontinent.

"They can't necessarily afford to take on the accommodation themselves. Often those workers are key to the economy - they're doing the jobs that not everybody wants to do," Neill added.

Neill acknowledged that while Abu Dhabi is currently suffering from a housing oversupply, much of the stock currently on the market will likely be out of the price range of tenants affected by the change in legislation.

"There probably isn't a massive oversupply of those types of buildings (affordable housing stock)," Neill said. "When this new law kicks in, they're probably not going to be able to afford most of the places that are oversupplied."

This rule change is not the only major shift in the Abu Dhabi government's housing policy of late. Last month, the municipality announced that all employees of government departments and their related entities had one year to move within the emirate's boundaries or see their housing allowance cut off.

Neill says that both policies are likely an attempt to reduce issues of housing stock oversupply in Abu Dhabi, where according to some figures, rents have fallen by up to 25 percent in some areas over the last year.

"I don't think it is necessarily a coincidence. The government have got to try and look at ways to reduce the oversupply," he said.

"They're trying to tackle this issue by looking at different options, and I'm sure that's what's going on at the end of the day, but sometimes in tackling one issue you create another one."

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Publication:Construction Week
Geographic Code:7UNIT
Date:Oct 17, 2012
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