Are pay hikes for UAE employees keeping up with inflation?

Living in Dubai is much more affordable than it was before the 2008 crisis. However, this year seems to be a bit different from the past couple of years as rents are going up in good localities in the city and the cost of education is ever-increasing, irrespective of the school.

But this increase in expenses has not translated into bigger salaries for most people working in the city.

According to Cliff Single, Commercial Manager at BAC Middle East, there is no pressure on employers to give extra financial incentives to their staff.

“Currently, we do not see any strong upward pressure on salaries given the overall market sentiment. In a recent client survey, only 5 per cent of respondents expected salary increases above the rate of inflation in the near term,” he told Emirates 24|7.

Experts believe that rents may be going up in good communities but the overall situation is much better than the boom years when house rents were eating up a big chunk of a person’s income.

“[If we] take standard of living and infrastructure quality into account, rents in Dubai are still exceptionally low compared to 2008, [thus] disposable incomes are still competitive compared to other Gulf states. However, rents in certain popular areas are now beginning to rise, albeit slowly, and the rising cost of education remains a major issue for families. The trend is likely to continue,” said Hasnain Qazi, Middle East Business Manager at Huxley Associates.

Agrees Konstantina Sakellariou, Partner, Marketing & Operations Director at Stanton Chase: “There is no significant change in the salaries.”

“The cost of housing has not really increased [much and] the increase was mostly [for] villas. There are many areas in Dubai with new houses [available at reasonable rents] (even if a bit far away). Of course, the areas with high demand saw a price increase.  Education [cost for] senior executives is usually covered so, if needed, it will follow the market [trend].  [But in a nutshell] the increases in [cost of living have] not pushed salaries upwards significantly,” she explained.

Majority of employees in the UAE believe that salaries are not keeping up with their expenses. “[Our] consumer confidence index shows that 68 per cent of professionals in the UAE [believe their ] salaries did not keep pace with the cost of living. However, 52 per cent of the respondents in the UAE believe their financial condition will get better within a year,” added Suhail Masri, VP of Sales at Bayt.com.

By Shuchita Kapur, Emirates 24|7