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Landlords must not exploit realty resurgence

Regulators should look at the market situation and update rent index for the benefit of tenants and landlords

Gulf News

Growth in Dubai’s property sector, especially the residential market, should not be greeted by tenants with a fear of higher rents. Growth is welcome. But it should not terrify tenants.

Latest media reports that suggest a rebound in Dubai’s real estate market might encourage landlords to exploit the situation by raising rents exorbitantly. In fact, some landlords have started to increase rents – violating the limits set by the Real Estate Regulatory Agency (Rera) that regulates the market through a rental index that stipulates the rents and the increases every year.

Some consumers have begun to fear the return of the scenario of 2007-2008 when the government had to introduce a rent cap to support the tenants — the worst victim of rising demand in the face of short supplies — at the hands of the landlords. However, the current scenario is totally different. The emirate has a large housing glut — with thousands of empty homes looking for tenants.

Unreasonable rent increase amid a glut should not take place. Property regulators should look into the market situation and update the rent index so that both the tenant and landlord can use this as a reference point. However, the consumers should also look at the empty homes where rents are lower, before agreeing to a higher rent.

While moving is always a hassle, it nevertheless can help a tenant save more from rental expenditure. That way, they can be in a better bargaining position with landlords.