Opinion | Editorials
Reviewing rent cap is timely
The logic behind the rent cap seems exemplary. Landlords in Dubai in many cases had been able to exploit conditions in which rapid demand was overwhelming supply, to the point where delaying the release of units promised even more money in the bank.
- Gulf News
- Published: 23:55 October 17, 2007
The logic behind the rent cap seems exemplary. Landlords in Dubai in many cases had been able to exploit conditions in which rapid demand was overwhelming supply, to the point where delaying the release of units promised even more money in the bank.
Naturally, those desperate for affordable accommodation were delighted by the cap's introduction, since we've all been hit in the pocket, whether it's for school fees, food or transport. The cost of living has become a source of considerable angst for households, and a factor also for businesses considering whether to locate here.
But controls are an imperfect approach, which is why reviewing the issue is timely. If units are not reaching the market because landlords are withholding them on grounds of inadequate return, then the situation is only aggravated by artificial intervention. That's the law of unintended consequences in action.
So it may be better, regrets notwithstanding, to allow the market to find its own level, enabling supply to respond to demand more consistently over time.
Meanwhile, underlying inflation is an untamed beast, and its remedy has yet to be found.
More from Editorials
More from Opinions
Opinion Editor's choice
-
Syrian crisis and rumblings of a cold war
By Patrick Seale, Special to Gulf News
With their vetoes, Russia and China are saying they too have interests in the Middle East, which they are bent on protecting
-
Motives for a new regional alignment
By Marwan Kabalan, Special to Gulf News
The relationship between Iraq and Syria strengthened following the breakout of the uprising and withdrawal of US troops
-
Learning Arabic must not be seen as a compulsion
By Rabia Alavi, Special to Gulf News
Expatriates must see its inclusion in school curriculum as an invitation to integrate into Emirati society and an opportunity to access markets presently reserved for Emiratis
Your turn
