UAE | Housing & Property

Abu Dhabi rent cap law welcomed by property dealers

The law issued by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan putting a seven per cent cap on rent increases in Abu Dhabi has been widely welcomed.

  • By Nissar Hoath, Staff Reporter
  • Published: 00:00 November 8, 2006
  • Gulf News

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Abu Dhabi: The law issued by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan putting a seven per cent cap on rent increases in Abu Dhabi has been widely welcomed.

According to property dealers this will control arbitrary increases in rents and will help further develop the real estate sector. They said the new policy and setting up a committee to handle rent disputes will also boost services.

Some dealers feel the shortage of properties in Abu Dhabi and its suburbs has led to the sky-rocketing rents.

Fat'hi Al Helou, General Manager of Al Baz Real Estate Establishment, said that he welcomed the new law, saying it came at the right time when rents were spiralling. "The increasing demand for properties, no control and an absence of regulations has led to these increases."

Linda Loughnane, Managing Director, LLJ Property, said that while landlords might be disappointed, it will "undoubtedly have a positive long-term effect on the economy, which landlords will ultimately benefit from."

Maria Khymz of DEMAR Property Management LLC, said the law should help stabilise the market. "People with low incomes who currently have housing should benefit from this new law as they will be able to budget for a seven per cent

However, she said the market is unfortunately very limited for low-income renters, and it will continue to be difficult for these to enter the market.

"Current apartment rents are driven by supply. There is limited supply in Abu Dhabi for all levels of apartments. Until supply more closely matches the demand we will continue to see price increases in new buildings for the next couple of years," she said. Mohammad Ali, Proprietor of Waves Property Management said that, if implemented in its full spirit, the law will benefit all tenants by helping them prepare their annual budgets.

He said: "There was no control. The increases were between 40 per cent to 50 per annually. In some cases rents were increased twice in a year.

"The demand for property has been going up, but the supply has been very low. There is a particular shortage of studio apartments and one- and two-bedroom flats."

COMPARISON
Current rental prices in Abu Dhabi

Studio Apartment: from Dh25,000 to Dh35,000
One Bedroom: from Dh40,000 to Dh60,000
Two Bedroom: from Dh70,000 to Dh85,000
Three Bedroom: from Dh75,000 to Dh120,000 and above

The recent increase in rents has been varying from 10 per cent to 35 per cent for studio apartment and one bedroom flats, 15 per cent to 40 per cent for two bedroom flats and 10 per cent 30 per cent for three bedroom flats.


Your comments


Welcome new law, thanks.
Jay
Abu Dhabi,UAE

I was kicked out of my four bedroom apartment after they increased the rent from 110,000 to 190,000 (in one year). I welcome this rule but the real problem is the current rents are already too extreme.
Baz
Abu Dhabi,UAE

Just before the new law came into effect which caps the rent increase at 7% annually in Abu Dhabi, as I know, the rent has been increased to 35% to 50% by property dealers. Hence, this is not justifiable. Property dealers should not have been allowed to increase the rent at such a huge rate before the law came into effect.
Thamban C. V.
Abu Dhabi,UAE

A highly appreciated move and thank you to his highness. The cap rate is really fair.
Agha
Dubai,UAE

H.H. Shaikh Khalifa has taken a very good step and it must be implemented all over the UAE, not only in Abu Dhabi because real estate people are just looking for money.
Qaiser
Ras al Khaimah,UAE

Congrats to all Abu Dhabi tenants you've got 7% cap increase, while for us in Dubai, congrats to our Landlords, you've got 15% cap increase. Anyway, as the saying goes: Dubai gets the top spot in everything, well done.
H.C Padunan
Dubai,United Arab Emirates

I welcome this new law. However this sort of law must also be in application for emirates like RAK where there are no rules
Sarwat
Ras Al Khaimah,UAE

The new law will definitely help the people from all categories, especially the low income people. Some landlords increase the rent by 100%. (30,000 to 65,000). Due to this tenants are forced to leave the flat and face severe problem to get another.
Abdul
Abu Dhabi,India

Highly appreciated move and thank to his highness. This may be followed in Dubai too, to control greedy real estate companies and inhuman agents.
MP
Dubai,UAE

I welcome the new law, if implemented in its full spirits, the law will benefit all tenants by helping us prepare our annual budgets.
RN
Abu Dhabi,UAE

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