Coral
Depends where you look. If you want to live in a 5 bedreem villa in Arabian Ranches, yes, I would say that's about right. Look around a bit and you'll find 3 or 4 bedroom villas in Jumeira, Barsha, Mirdiff etc. for 180,000 - 200,000 or so. I know, I'm looking too! This still means you'll have to contribute out of your own pocket, but at least it's a bit less.
As per the housing allowance, yes, it's not very realistic. Problem is, it's based on Serco's rental costs of the villas in Palma Springs - the compound where most controllers used to live (and some still do), which are significantly below the market rate. From what I hear, the rate keeps slowly creeping up but don't hold your breath for it to catch up with the market.