Abu Dhabi to make state employees reside in the emirate

15 Sep 2012

(MENAFN) Abu Dhabi plans to make its public sector employees come back and reside in the emirate, a move seen as a measure to tackle the big glut in its real estate market, Reuters reported.

“Employees residing outside the emirate will not be eligible for the housing allowance” provided to workers in state institutions, the government said in a recent circular.

The new rule will be in vigour after a year and will affect citizens of the UAE as well as foreigners who are working for Abu Dhabi government and all its wholly owned entities and companies, the circular said.

It is estimated that many thousands of state-employees are living in the neighbouring emirate of Dubai because of lower rents there or a lifestyle which they see as more comfortable.

The circular indicated that the policy aims spare its workers from the traffic and road accidents, an apparent reference to the risks of commuting on the 130km highway through the desert between Abu Dhabi and Dubai, which is packed with cars at rush hour.

However, analysts see the policy as being designed to help absorb a large supply of new high-end homes that are set to come online this year.

Property prices in the emirate have tumbled about 50 percent since the global financial crisis hit the market several years ago, analysts estimate, and the new supply threatens to undermine them further.