7 %
A new very caring law about the Rent Cap was passed only yesterday. It says that the greedy Landlords can increase the rents with only 7 % from now on. Well, it was about time as the cost of living in Dubai is becoming ski-high. I wonder where we are in this years list of most expensive cities in the world. Source, Source.
7 comments:
Good news, even if it's a little late in coming. Market pressures will probably ease rents this year anyway, but it stops prices getting out of control in popular areas. Now all they need to do is have a tough system on landlords trying to avoid the system and all is sorted.
It is great news - but without wanting to put a downer on things. That means all property will rise by 7% still?
Not necessarily, if you are already in a property and your rent was raised during 2006, then they cannot raise it at all within 2007. The only time control is lost will be when the property is actually vacated.
No, not necessarily. At the moment it has been increasing at about 40% since last year. Those who had enough documentation could take their landlord to court to get the new contract set at the 15% (and now 7%) rental increase cap. It is the people just moving into new places that have the problem because the rental amounts are higher. For example, some people have renewed for a 2 bedroom villa at 15% increase for about 95-98,000 AED, but new people moving into a villa for the first time have to pay 130,000 AED for the same villa at the moment, because the landlords increased the rents as much as they wanted after their tenants moved out. So basically, you can only take advantage of the rent cap in subsequent years of living in the same place. This is why landlord are so busy trying to evict people - so they can raise the rents in excess of 40%. Having said this, lots of new apartments and villas are coming onto the market soon, so that could drive rents down as landlords fight to get people to move into their places since there will be so much available and they don't want their apartments and villas sitting empty. This could drive rental prices down. I personally think only apartment rents will come down, not villas.
Yup, expect apartments to be the main driver of the decrease. Villas will follow at a slower rate only as people realise they could have a 2 bed villa or a bigger 3 bed apartment at the same price and move. There are some more villa complexes in the pipeline but they won't be as quick or as numerous to make too much of a difference, rather just soak up the general population increases.
people sem to forget that rents will still RISE either way, with no annual 7% increase in salary.
And there is a lot of talk about tons of new property coming online. What's out there besides International City that is affordable and coming online this year? The overpriced cubicles at Marina?
hit the nail on the head - its still another 7% increase against a static salary for most
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