RERA aims to control property rents through new price index

Dubai: Dubai's Real Estate Regulatory Authority (Rera) has revealed their rental index that they hope will replace the need for rent caps in the future.

Rera on Wednesday announced Dubai's first residential and commercial rental price index.

The rental index has been designed to give average rental rates across different zones of Dubai.

"The government has already interfered three times to impose rental caps and now there is hope that the rental index will remove this need," Rera said in a statement to media.

The commercial index gives the average rental rates for properties, based on road conditions, public parking, location, air conditioning, view and age of the building.

Office prices are also dependent on whether the building is on a main road, sub-street or an inside building.

Rental prices for residential properties, however, are not clear. Properties are divided into apartments and villas, and are based on the size of the building only and no other criteria.

Prices were not given.

"Rera will constantly update this rental price index to match market factors and changes. This index will stop owners from putting the rents too high in the market," said Mohammed Khalifa Bin Hammad, director of Rera's real estate relations regulatory department.

Should Rera fast track the database building with suggested pricing rentals? Will the database help tenants get a better idea about the rent they should be paying? What can be done to bring more clarity in rules for tenants and landlords?

If this Law is implemented then it would be an ideal new year gift to all tenants who are at the mercy of their landlords inflexible and unrealistic rent increases. Just stamp it and make a history. Well done RERA
Muhammad Mansha
Dubai,UAE
Posted: January 15, 2009, 15:27

With old and new buildngs side by side how will RERA fix a rent for a particular area? Facilities in each buiding is different and so rents cannot be the same. This problem needs more thought and a decision must be taken wherein neither the landlord nor the tenant suffer. A rent cap would be best in this situation. Rents are already too high in Dubai and Sharjah and some control is required on further hikes. In fact rents could be lowered or frozen for a year to help people manage the economic recession. So far everyone was paying high rents to the benefit of the landlords, so now the situation could be reversed for a while for aiding the tenants.
Naina Nair
Sharjah,UAE
Posted: January 15, 2009, 15:04

Rental prices for residential properties are not clear? This is need of today! Everyone is waiting desperately Rental Price index for Residential properties.
Preetam
Dubai,UAE
Posted: January 15, 2009, 10:58

This is the great thought which i also was thinking from many days that caps should be introduced not for the rentals but also for selling and purchasing the properties. This will help to control the speculation factors in the market.
Mohammad Tarek Amin
Dubai,UAE
Posted: January 15, 2009, 10:55

Anyway what it matters is rent should not be increased heavily and I think rent cap idea is good and at least it should be enforced every year.
Ali
Dubai,UAE
Posted: January 15, 2009, 10:36

Yes, Rera should fast track,this really will help tenants to get better idea about the rent they should be paying,but i think the RERA's pricing policy should observe fairness and take a look at current financial situation.The index will be more useful than rent CAP, because the rent cap always just showing the increase in the rent but updating the index will be based on market conditions(and other criteria)and sometimes show the increase and sometimes decrease in the rent of a property.(hope to be so)
Ramin
Dubai,UAE
Posted: January 15, 2009, 10:09

I believe this move is very much practical and look forward to its sustained and long term benefits / relief in terms of accomodation and inter-state traffic congestions specifically for sharjah-dubai commuters
Syed Qaisar Mehdi
Dubai,UAE
Posted: January 15, 2009, 10:01

RERA's yardsticks for Residential price index do not consider many crucial factors like the age of building, facilities of a building, building specifications, etc. A tenant who stays in an oldest and very basic apartment need not pay the rent of a luxury apartment. If a tenant has to pay based on size only, those who stay in a 25 year old very basic building, is forced to pay the same rent of a new luxury apartment. Can we imagine of selling a 10 year old car at the cost of a brand new 2009 model? The new price index, if it is merely based on size of the apartment, gives the landlords a golden chance to shoot up the rental of low income houses. RERA may please consider all facts before fixing a price index.
Johnson PP
Dubai,UAE
Posted: January 15, 2009, 09:56

This wont work.. a "rental index designed to give average rental rates" is not really a law or binding regulation that forces landlords to ask for realistic rents. If the rent caps are removed, landlords will ask for whatever they like on grounds that their specific property is 'better' than the market average (and of course, every landlord believes that their property is indeed better!). In a domino effect, all properties will skyrocket again.. and then rent caps will have to be implemented AGAIN!
Kareem
Dubai,UAE
Posted: January 15, 2009, 09:41

this year there should be complete stop in increase the rent ,but review to decrease. Payment schedule must be in 5 to 6 cheques. everyone must register with rera.when the crisis is over, then cap should be imposed according to the location, still there is need to calm down.
Naseer Ahmad Nasir
Dubai,UAE
Posted: January 15, 2009, 09:36

RERA should go slow, think it through or else it will lead to more confusions n chaos in the market.
R Suresh
Dubai,UAE
Posted: January 15, 2009, 09:36

Impose the law strcitly so the landlords can not manipulate the rent cost. Landlords have so many ways to circumvent the law and most tenants can not do anything except to abide by the rule of the landlords. RERA should be strict in implementing the rules and no exception whatsoever to avoid loopholes.
Roberto Roy
Dubai,UAE
Posted: January 15, 2009, 09:14

What about in one particular area, one building is 20 years old and the other is only 2 months. Still the rents will be same? I dont believe authorities should do that. In fact they should count the age of a building in deciding rents for one particular area. This is very cruicial.
Mohammad Siddique Iqbal
Dubai,UAE
Posted: January 15, 2009, 08:58

This is a step in the right direction. However, the Residential Index should consider other factors like locality, age of building, amenities provided etc. Also, the prices should be realesed soon to help people who are planning to renew lease or change apartments.
Ratnesh Varma
Dubai,UAE
Posted: January 15, 2009, 08:53

Finally, we can feel relaxed. No headache, thank you so much Rera
Ahmed Alwan
Dubai,UAE
Posted: January 15, 2009, 08:47

well, in my opinion , a rent cap should never be removed , I don't understand why there is a need to get rid of it , it should stay even if prices become reasonable , to impose control on landlords behaviour for ever , however there are other things that should be done that could put things in order , for example :- why are the real estate offices charging a % of the rent , in my opinion this is a main factor in making the prices high, the service a real estate office is providing for a person who rents a villa for 400k is the same as for someone who is renting a studio for 50k , they should be getting a fixed fee , say 1000 Dhs, so they will not hike the prices to increase thier income , also they should get another fee , say 1000 dhs if they were assisting the tenant in searching for property , but if the tenant contacted them directly , then they are not entitled for the second 1000 DHs . as for area index I do like the idea , certain groups of inspection committees should be formed to inspect all properties and give them a rating , based on location , level of finishing , age of building , size of apartment or villa , ( regardless no of bedroomsas they can be too small ) facilities ..etc , and a range of rent should be fixed for each category where landlords can't continue their greadness , the cap will then help the landlord and the tenant to have a continuous relationship by referring to the index updates , say once overy two years , and adjusting the price up or down , to be in line with the new updates if it increase or decrease, with a cap of no more than 3 or 5 % up or down from the value of the original contarct as registered in its latest record . that shoud make it a fair game .
Abdul Latif
Dubai,UAE
Posted: January 15, 2009, 08:22

first of all there should be only one real estate and its branches, you should remove all the real estates and broker from whole dubai, they corrupted all the people and landlords.
Mohammad Amanullah Khan
Dubai,UAE
Posted: January 15, 2009, 07:57

Late but not too late, it's a good move from Rera, hope the life of people will get some ease. I wish the buildings should be rented direct from owners not real estates, they are the main reson of high rents. hiring direct from owners will also save people paying heavy commissions.
Abdul Razzaq Raja
dubai,Pakistan
Posted: January 15, 2009, 07:43

I think this is a major and a fantastic step towards the whole scenario. as this will definetly curb the monopoly of the Landlords. This is a great step towards both the benificiaries. I think all the factors should be considered while tagging a rent price.
Sibu
Dubai,UAE
Posted: January 15, 2009, 07:42

now it may be too late for this step. RERA has to think about freehold, which is in very big problem. rera have to make a balance between developer and buyer
Naseer
Dubai,UAE
Posted: January 15, 2009, 02:11