Abu Dhabi to ask builders to allocate 20pc projects to low-income groups

ABU DHABI — Abu Dhabi is putting forth a proposal to real estate developers for allocation of 20 per cent of their developments to low-income groups, so that enough supply could be created to calm down soaring rents and contain rising inflation.
“We are not in favour of a rent increase cap of 5 - 7 per cent a year because we are looking forward to revoking this percentage and fixing rents in the coming period,” said Butti Ahmed Al Qubaisi, assistant undersecretary, Department of Planning and Economy, Abu Dhabi, while speaking to reporters, on the occasion of announcing a weekly report on economic indicators to
be issued by the department from next week.
He said that a report on addressing and tackling inflation and soaring prices of commodities and services has been presented to the Abu Dhabi Executive Council for action.
“The report envisages a set of mechanisms to curb skyrocketing rents which is now on top of the department’s agenda,” said Butti Ahmed Al Qubaisi.
He added that the department had worked with a number of cooperative societies to fix prices of many commodities, in order to arrest spiralling inflation.
Al Qubaisi said the cooperative societies had reacted positively in this regard and an agreement was reached to unify the process of imports through one pool of cooperative societies.
He noted that foodstuff will have a weightage of 11 per cent in the new consumer price index (CPI) of seven sectors, the department is planning to issue, while the energy and transport sector will account for 8 per cent.
The assistant undersecretary said that a study conducted by the Department of Planning and Economy Abu Dhabi, for the Abu Dhabi Executive Council showed that high rents contributed 60 per cent of inflation which was set at 10.7 per cent in the year 2007 while high food prices and petrol and diesel prices account for 18 per cent and 15 per cent respectively.
“A study is being conducted now on high rents in Abu Dhabi,” he disclosed adding that only 10 to 20 per cent of people who are benefiting from high rents in Abu Dhabi come from the low and medium income group, while 80 to 90 per cent of them are those who already earn high incomes.
The prices of year 1997 would be used as base year to determine the consumer price index (CPI) he said. A law would be promulgated in weeks to setup a separate agency for statistics, which will be the sole body responsible for announcing and verifying authentic and accurate figures and statistics on the economy of the emirate of Abu Dhabi.