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Expatriates based in the United Arab Emirates (UAE) are likely to see their housing allowances increase over the course of this year.
A survey of 147 companies carried out by Mercer, found that nearly a quarter in Abu Dhabi and a third in Dubai intended to up the benefit.
As many as 35 per cent of firms in Abu Dhabi and 41 per cent in Dubai said that they will increase housing allowances in the next few months.
Nine out of ten expats in the former state are likely to benefit from the move, whilst 82 per cent in the latter will see an improvement.
A spokesman for Mercer told iExpats: "The companies are not doing this out of the goodness of their hearts but in response to rising rents, especially in Dubai.
"Rents in Abu Dhabi are more stable, so companies there are under less pressure to pay extra benefits."
The cost of rent in Dubai has been going up as much as 30 per cent annually in recent years, meaning it will take time for increased allowances to meet the shortfall.
In 2013, 15 per cent of firms in Abu Dhabi granted higher housing benefits than the previous year, along with 25 per cent of those in Dubai.
Such high rents are proving a problem for companies looking to recruit new staff as the cost of living is putting off some of the top talent.
It is a similar situation when it comes to employee retention, as those who have been in the UAE for a while are noticing the difference and subsequently returning home, when not being adequately compensated.
The Mercer spokesman said: "It's clear a lot of employers can see that they have to offer expats a better financial package to compete with other countries."
Around 90 per cent of the 9.2 million residents of the UAE are expats.
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