Registry will help regulate rental market

From the beginning of the new year, the Real Estate Regulatory Authority (Rera) will require that all tenancy contracts in Dubai be registered to help it better evaluate and regulate the housing rental market.

Until recently, rocketing rentals were driving up the cost of living in Dubai and deterring many from living and working in the emirate, at some expense to the economy. But the property and rental markets were among the main drivers of economic growth in Dubai.

Now, there are signs that rents are easing as more apartments come into the market and as the global economic slowdown brings down demand for high-end units. Given the importance of rentals to the residents and the government of Dubai, the authorities should monitor the market to be able to intervene when abnormalities occur.

The cap on rent increases and the rent committees, set up to deal with disputes between tenants and landlords, are good examples of this.

Further innovations in the rental market, like spreading rent payments over 12 months to make accommodation more accessible to people, are also good ideas that can be researched using the information in the contracts.

However, any government intervention in the rental market should be light and not intrusive for the relationship between landlords and tenants. In fact, should work as a facilitator for the rules of a free economy.

The Dh100 charge for the online registration has also raised some concern that the initiative may be little more than a revenue generating exercise for the authorities.

The role of government is to monitor the market and to regulate it to prevent abuses by tenants and landlords. We hope the development of the new tenancy contract registry is the first step in that direction.