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21.07.2014
As a result of the sharp increase of rents over the past year, inflation in the UAE has gone up; housing and utility costs make up nearly 30% of all consumer expenses. UAE inflation reached its highest in more than five years last month as rising rents and food prices push up the cost of living.
The consumer price index rose to 2.2% compared to the same period last year, up from 2% in May, according to data from the National Bureau of Statistics. On a monthly basis, the index edged up by 0.4% last month, compared to 0.2% the previous month.
“It’s the same inflation drivers for Dubai as it is for Abu Dhabi. Housing and food are having the biggest impact,” said Alp Eke, senior economist at National Bank of Abu Dhabi. “In terms of housing, the CPI is a sample of new and old rental contracts as a proportion of housing costs and it will become increasingly biased towards new rent in the coming months, so it is likely to push the CPI upwards.”
With rents increasing sharply in Dubai and Abu Dhabi over the past year, inflation data has been affected. Housing and utility costs make up more than 39% of consumer expenses. Last month, housing costs edged up 2.4% from the year earlier and 0.1% from the previous month.
Still, the rise has yet to capture the full extent of the rebound in property prices. Average rents in Dubai gained% in the second quarter of the year, up from a 23% rise in the previous quarter, according to a report released on Sunday by property consultant JLL.
The consumer price index rose to 2.2% compared to the same period last year, up from 2% in May, according to data from the National Bureau of Statistics. On a monthly basis, the index edged up by 0.4% last month, compared to 0.2% the previous month.
“It’s the same inflation drivers for Dubai as it is for Abu Dhabi. Housing and food are having the biggest impact,” said Alp Eke, senior economist at National Bank of Abu Dhabi. “In terms of housing, the CPI is a sample of new and old rental contracts as a proportion of housing costs and it will become increasingly biased towards new rent in the coming months, so it is likely to push the CPI upwards.”
With rents increasing sharply in Dubai and Abu Dhabi over the past year, inflation data has been affected. Housing and utility costs make up more than 39% of consumer expenses. Last month, housing costs edged up 2.4% from the year earlier and 0.1% from the previous month.
Still, the rise has yet to capture the full extent of the rebound in property prices. Average rents in Dubai gained% in the second quarter of the year, up from a 23% rise in the previous quarter, according to a report released on Sunday by property consultant JLL.
