Business | Property
Abu Dhabi residents demand rent rise cap
Abu Dhabi's red-hot residential rental market is unlikely to cool in the short term with rents climbing nearly 30 per cent annually and residents demanding a rent cap similar to Dubai's.
- By Stanley Carvalho, Staff Reporter
- Published: 23:34 May 3, 2009
- Shortage of apartments means red-hot market is unlikely to cool.
- Image Credit:
Abu Dhabi: Abu Dhabi's red-hot residential rental market is unlikely to cool in the short term with rents climbing nearly 30 per cent annually and residents demanding a rent cap similar to Dubai's.
Property management companies and real estate agents attribute the soaring rents to an acute shortage of one- and two-bedroom apartments.
"At present there is an acute shortage of quality accommodation, particularly in the middle and affordable price ranges and there have been significant increases in rents," Andrew Chambers, managing director of property management company Asteco, told Gulf News.
According to data from Asteco, the average rent (June 2006) of a one-bed-room apartment in the capital is Dh53,000, two-bed-room apartments are Dh76,000 and three-bed-room apartments are Dh127,000. From June 2005 to June 2006, rents have increased by 33 per cent for single-bedroom apartments, 23 per cent for two bedrooms and 30 per cent for three bedroom.
However, there are apartments in some areas where rents are lower, but they are rising, fuelling inflationary pressures.
Resident Basel Al Bendari said: "The landlord sent a note saying the rent will increase to Dh40,000 from the present Dh30,000 for my single-bedroom apartment when my contract comes up for renewal next month."
"The over 30 per cent jump is unreasonable. A 5 to 10 per cent hike annually is understandable. Either take it or leave it was the order," said the Egyptian banker who lives in Al Salam Street.
"I think the authorities have to impose a cap on rental increases because owners are aware of the high demand for residences," said Yvonne Vaz, a mother of three children.
"Our rent was hiked 25 per cent recently, forcing us to sub-let a room in our three-bedroom apartment."
Dubai has had a cap on rent increases of 15 per cent a year since November last year.
Several anxious Abu Dhabi residents who spoke to Gulf News disapproved of the arbitrary hike in rents, urging the authorities to come to their rescue.
According to Prime Emirates, an investment research house in Abu Dhabi, the limited data available suggests a relatively subdued delivery schedule for the next few years is expected to prolong the current housing shortage until 2008.
"This implies rents and prices in Abu Dhabi are likely to continue on an upward trajectory during the remainder of the current year, as well as next year," it said in a recent research report.
The report also forecast a rapid rise in the capital's population with a steady inflow of expatriates.
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