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.