Tenant relief as Abu Dhabi cuts rent cap

RENT CAPS: Abu Dhabi Executive Council says restricting rent increases will help stabilise the property market.

Rent increases in Abu Dhabi will be restricted to 5% for the remainder of the calendar year, the Abu Dhabi Executive Council said on Sunday.

According the council, the move aims to bring greater stability to the property market by limiting the inflationary effect of rent increases, state news agency Wam reported.

The need for the measure stems from strong economic growth in recent years, along with rapid successive jumps in the demand for residential and commercial real-estate, the council said.

Consumer price data suggests apartment rent increases have been the main driver for unprecedented inflation in Abu Dhabi, with more than 50% of increases in the consumer price index over the last reporting period due to the raising of rents.

The government says rent caps should be viewed as a temporary measure, and that it is overseeing the implementation of significant urban development projects in response to increasing demand for real estate.

It claims that as a result, large numbers of residential and commercial properties will become available in the short- and medium-term, ending the need for further intervention.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Rent Hike in Abu Dhabi
Posted by Zubair, Abu Dhabi, UAE on Tuesday 15 January 2008 at 16:10 UAE time


We paid our rent on 7th Jan and they charged us 7 % increase and collected payment for whole year . What do we do???

Equal Steps Throughout the Emirates
Posted by Nizar Ibrahim, Dubai, UAE on Monday 14 January 2008 at 13:46 UAE time


The rent cap should be applied throughout the Emirates as inflation is equally hitting the population of, sharjah, Ras AlKhima, etc.

Rent raises
Posted by Victor James, UAE on Monday 14 January 2008 at 13:01 UAE time


Till 2003 there were plenty of homes available and rents were reasonable across the emirates. Then started the Real Estate Company ( Mark my words ) boom.It is clear in any business that a middle man will add their margins to whatever they sell. In this case the additoins are not on any logoc, but on greed. Unless the real estate companies are eliminated in the process of renting out, no one will get a fair tenancy contract.

The solution to this is simple. The government can easily develop a matrix of building location/ age of the building/ apartment size and fix up the rents and circulate it on their website / municipality websites. All renewals have to be done at the municipality. Once the deposits and cheques are received at the municipality, these can be delivered to the owner. Service charges can be levied from the tenany which can be added to the registration costs.

Increments in rent should and will take place as per law.

This is not at all a difficult effort as already enough infrastructure and personnel are deployed at all municipalities to handle arbitration. This will bring additional revenue to the government, employ more nationals and also ease the inflation.

Rent caps and other efforts never work as there are hidden costs like key money and commissions to be paid for the existing building manager, the watchman, the person who takes one around to show the building/apartment etc.

Increase on rents
Posted by Faisal, AD, UAE on Monday 14 January 2008 at 12:26 UAE time


After i have been charged an extra 7% on my house rent already for 2008!

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM