Dubai tightens curbs on rent hikes
Dubai, January 20, 2009
Dubai has banned raising rents of residential and commercial units in 2009 unless rent values were less than 75 per cent of an average set by the property regulator, the official Wam news agency reported.
'The decree is intended to curb constant increases on rents of property in the emirate to bring them to reasonable levels,' it said, citing Mohammed al-Shaibani, director of the ruler's court, as saying.
It also aims at 'striking a balance between the interests of owners and lease holders and stabilising the property rental sector which would have a positive impact on the overall economic growth in the emirate', he added.
The measure also sets a formula allowing proportional increases in rents that fall below the average set by the Real Estate Regulatory Authority (Rera), WAM reported on Monday.
Rera had introduced an official rental price index for the emirate for all types of property. Dubai was the first in the Gulf Arab region to cap rents in 2007 to help tackle soaring inflation and spiralling rents amid a property boom.
Rental rates for apartments and villas have been levelling off throughout 2008 with an average growth rate of 4 per cent and 8 per cent respectively, property services firm Asteco said last week.
Commercial real estate services firm CB Richard Ellis also said last week rents in Dubai were showing the first signs of levelling off.
Despite the absence of any growth in the final quarter of 2008, rental growth for the year reached 50 per cent for industrial buildings, 29 percent for offices and 18 percent for retail, it said.-Reuters