Dubai ruler issues decree to freeze rents in 2009

Posted by: Dr. Dolittle Sunday, 1 February 2009 3:22 PM[UAE] - U.A.E

It is clearly evident that given the current state of affairs, something needed to be done by the concerned parties to protect the interests of their own. Having the landlords up in arms over the rent caps for the last few years, created an opportunity for the authorities to pacify them this time around. Now that most expats are packing up owing to spiralling costs, landlords are now the biggest losers with them having to lose more money! The WHY? The logic is landlords lost 'potentially' more earnings than forecasted owing to the rental caps in place over the last few years. Now with the mass exodus of expats, they need a way to make up for that deficit caused by the Government and their rules. The Answer! Impose rent increases on people they haven't managed to get yet! The guys who were smart enough to come in early and choose rental properties wisely! For those that came in last year (2008), the landlords had their share of their dosh. Lets skip that lot (for now). Voila, A rental solution that makes everyone happy!!! Well, if statistics indicate the same, then it must be true...?

Posted by: Abdul Haque Tuesday, 27 January 2009 5:17 AM[UAE] - U.S.A

The Rent Index announced by the Rera is in li9ne with the rentals in UAE ( ) Some tenants are paying rents for 3 bed rooms villa just 120,000/- per year ( ) It is not rediculous in paying this rental for a villa in a good and posh locality ( ) If somebody want to have less rental they should move to Ras-Alkhima, Ummm sequan and other remopte places of the emirates ( ) The landord invested large sum of their hard earned money atleast to get reasonable rents out of the investments ( ) Abdul Haque

Posted by: duncan Monday, 26 January 2009 9:43 AM[UAE] - uae

What adds insult to injury in the whole RERA fiasco is that these heightened rents we have seen over the last few years are what has forced people to share villas. This is supposedly illegal but in truth it is what has supported the over inflation of housing costs. If only families lived in these villas, no one would be able to afford to pay the extortionate rates currently being charged, demand would drop massively and the market would adjust accordingly. However people are still sharing, and being forced to do so more and more by the ever increasing rental costs, thus further compounding the issue. While there are no easy answers, landlords and the government trying to have their proverbial cake and eat it is only pouring more fuel on the fire. Meltdown anyone?

Posted by: Paul Friday, 23 January 2009 10:05 PM[UAE] - UAE

Being a resident of the Springs, and having read through the relevant section of the rental index (2nd half of 2008) as well as the Decree No 1 of 2009 in more detail, I am wondering about the following: 1 - the rent for a 3-bedroom villa in the Springs is indicated (rental index) to be somewhere in between AED 250k-280k. Having had a look at some of the popular Dubai real estate websites (e.g. propertyfinder.ae and dubizzle.ae), it appears that this type of villas in the Springs is currently on offer for rent for as low as AED 170k (several properties listed at that price); and that a large number of similar / comparable villa units in the Springs is currently available for rent under AED 200K. Assuming that the "real" market rental price for a good number of these villas is currently in between AED 170k and AED 200k, this would indicate that the rental rates proposed by the rental index are by some AED 80k (or 40-45%) over the current market price. Something appears to be "out-of-bounds" here... 2 - the same rental rate band applies to a similar / comparable villa unit in the Arabian Ranches (according to the index). Everyone in Dubai knows, that similar / comparable units in Arabian Ranches are by 15-20% higher than in the Springs. How shall that work ? Someone explain to me, please... 3 - The Decree No 1 of 2009 states in Article (4), ad (2) that the Real Estate Regulatory Agency (RERA) shall review and update the Rent Index of the Emirate of Dubai "periodically"... Well, given the above examples, it is probably time to start reviewing the index NOW (beginning 2009). It is most obvioius that the rates published in the index are not only completely outdated by now (from mid 2008); moreover, they are by some 40% over the current "real" market rental rates. An urgent review is therefore indicated - shall the rent index ever have any meaning... This needs finetuning - quickly... !!

Posted by: Suresh Thursday, 22 January 2009 11:52 PM[UAE] - UAE

In any other part of the world , the person who earns an income or makes a profit , pays the tax. But here in Dubai we who pay the rent ALSO pay the tax - the land lord pays nothing. The economic department charges me a 5% tax on the rent I pay for my house and another 5% as my wife is also a director in the business - though we are occupying only ONE house ! Neither logical nor fair. I am also made to pay an arbitrary tax on the accommodation occupied by my staff. Not just that as a commercial enterprise we have to pay 15% of our rent value as tax to the Dubai land department. Not logical and not fair. If any one can explain why WE pay taxes for the money we spend but the landlords do not pay tax on the money they make I shall be grateful.