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.
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