Dubai rents among world’s priciest

Dubai is the one of the most expensive cities in the world in which to rent accommodation, according to a study released today.

The emirate ranked 14th out of 92 cities surveyed by consultancy firm ECA International, based on the price of renting a three-bedroom apartment.

Hong Kong topped the list, with an apartment in a popular district costing around $8,592 per month, followed by Tokyo, New York and Moscow.

At the other end of the scale, Nairobi, Kenya, ranked the world’s cheapest city, with Charlotte and Atlanta in the US close behind.

Muscat was judged the sixth cheapest location to rent accommodation in.

The news of Dubai’s position on the list will come as no surprise to the city’s residents, who have seen the cost of accommodation rocket in recent years.

Residential property rental rates have risen, on average, by an estimated 65% in the past two years, which has raised concerns over impact that this is having on overall consumer price inflation.

The International Monetary Fund (IMF) estimates inflation in the UAE at around 10%, but said it could be much higher in Dubai itself.

According to a survey by HSBC and YouGov Siraj, 55% of UAE businesses are worried about inflation, especially the increasing cost of accommodation.

In an effort to control rental costs, the Dubai authorities introduced an annual rental cap, which it cut by more than half at the beginning of this year. Landlords are now only allowed to increase rents by a maximum of 7% per annum, compared with 15% last year.

Many banks have predicted that the rent cap, coupled with the expected doubling of residential units in Dubai by 2008, will bring down inflation, with National Bank of Abu Dhabi (NBAD) stating inflation will fall to its lowest level in three years in 2007.

If inflation levels do not drop there is the danger that soaring cost of living will deter workers from living in the emirate, which could cause damage to the economy.