Rising rents in UAE pose biggest problem

Dubai: Rising rents across the UAE are causing a problem for many families.

Dubai was the first emirate to introduce a rent cap in 2005, when His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai issued a degree capping the rent increase per year at 15 per cent of the annual rent of a property.

The rent cap for 2007 was seven per cent, and this year's cap was five per cent.

Despite these regulations, rents are continuing to rise significantly across the emirates.

Rent increases and a disparity between salaries is forcing families to take cheaper accommodation, which may or may not have been divided illegally.

The number of high-end properties currently being developed by Emaar, Baani, Cirrus and Skygardens, for example, far outweighs the number of affordable housing solutions being built.

Nakheel's International City development is one of the few that offers some of the lowest rents in Dubai.

Developments are also underway, providing housing for labourers, such as the Al Rayan project in the Al Mafraq area, 45 kilometres from Abu Dhabi city centre.

However, there are no forthcoming projects dedicated to affordable housing for low-income families.

Bur Dubai and Deira in Dubai historically offer cheaper housing, but these areas also are experiencing rent hikes as they become increasingly popular.

Analysts, however, have predicted that over the next two years as more units become available, there will be an overall adjustment in price (although housing near forthcoming Metro stations will be costly).

Elaine Jones, CEO of property management firm Asteco, said by 2010, Dubai's housing market will see a greater range of prices depending on quality and location. "We believe there will be a greater differential in values," Jones said.

Jones said because of the tight demand and supply situation currently in Dubai, many prices are almost the same regardless of quality or where they are, but the situation will be "shaken out" by 2010.

Crackdown on villas

Dubai Municipality is currently carrying out a campaign, cracking down on multi-occupancy villas. A previous campaign in 2005 targeted bachelors living in premises that were designed for fewer people.

The campaign targets villas housing families, which have been illegally converted to accommodate more people than original building regulations allow. As part of this campaign, Dubai Municipality urged residents to report buildings that were breaking the law through over-occupancy via advertisements. A month was given to residents living in such accommodation, which ends today.

Dubai Electricity and Water Authority has been instructed to cut off utilities at the end of the specified notice periods by the municipality.

However, a disconnect between tenants and landlords was discovered by Gulf News at the end of July. While landlords had been served notice, tenants were oblivious to the situation and were returning home from work to discover that the amenities had been disconnected.

Dubai Municipality has also clarified that only immediate family members are allowed to share villas.

Dubai Municipality's Head of Building Inspection section in the buildings department, Engineer Omar Abdul Rahman, said distant relatives such as cousins and their families will not be allowed to share villas, assuring residents that the "one family per villa" rule still applies.

"As long as the tenants are members of the same family they can live in one villa, but distant relatives cannot," he said, adding that every case is assessed individually.

With inputs from Suzanne Fenton, Staff Reporter