Analysis from the expatriate compensation specialists for the first quarter of 2017 show a continued oversupply of housing at the upper end of the rental market in Abu Dhabi and Dubai. This is seeing rents fall across the UAE.

Room for negotiation?

In some cases this means, particularly where landlords have mortgages to pay, there is room for assignees to negotiate on rental costs.AIRINC reports that landlords are offering one month’s free rent or flexible terms, for example.

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Tax on rent risk

AIRINC is also warning of a retrospective tax bill on housing costs, offsetting the rental cost falls. This may see expatriates landed with a backdated bill for 2016.Following the introduction of the Municipal Fee last year in Abu Dhabi, expatriates could be asked to pay the three per cent tax on rent from last year.

Energy prices rise

Across the Middle East, AIRINC’s analysis continues to track the trend for rising energy costs as government subsidies decline.Consumer gas prices in Abu Dhabi increased by 28 per cent last year. Similar rises are reported in Muscat, Oman (29%) and Doha, Qatar (32%).Bahrain is the exception. Gas prices in Bahrain’s capital and its largest city, Manama, fell by a fifth.

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