Rental index
A new house rent index that will suggest benchmark rents for all the communities in Dubai, to be published soon by Dubai's Real Estate Regulatory Authority (Rera), is expected to reverse the gains of a seven per cent rent cap and turn the tables against the tenants in favour of the landlords.
The index will have separate prices for studio, one-, two- and three-bedroom apartments and villas in each community that will help landlords and tenants to benchmark their rents against the published rents in case of a dispute. It will also help the Rent Committee to settle the disputes.
"We are looking at a lot of factors. The index is a guideline for new people who are coming to Dubai," Rera chief executive Marwan Bin Galita told the media on Sunday.
It is hoped the pricing index will act as a comprehensive guideline to all tenants and landlords in Dubai. "The index will be introduced when we're confident that it's going to help the market," Bin Galita said.
By 2009, all new properties and rental contracts for commercial and residential units will be incorporated into a full database of rental agreements in Dubai, he said.
The new rent pricing index, designed to ensure that new people moving to Dubai have a clear picture of how much property is in specific areas, will help the market, he said.
Rising rents, jumping between 50 to 100 per cent over the last few years, have prompted Dubai Government to introduce a 15 per cent rent cap in 2005 - which was lowered to seven per cent - to help the emirate's marginalised middle income group. The rent cap, which managed to stabilise the market to a certain degree, has come under fresh attack with landlords, who were trying innovative ways to bypass it, complaining that they are forced to rent out premises below the market price.
Elaine Jones, chief executive officer of Dubai-based property consultancy group Asteco, said, "It's a huge subject. There is so much disparity in the market now. Some tenants are paying more than double what other tenants are paying within the same building."
Growing fears
Analysts fear the new rent index will be used by the landlords as an excuse to bypass the rent cap. "This will provide another excuse to the landlords to bypass the rent cap," said a property analyst, requesting anonymity. "They have tried all tricks in the past. The rent index will provide the necessary tool for them to try and violate it."
Meanwhile, Bin Galita said there is enough housing supply in the Dubai market but the land is being held by greedy investors and real estate agents.
"There is enough supply in the Dubai market but because of greedy real estate agents or greedy investors, they are keeping the ground," he said.
"New projects are coming so people won't be able to leave their houses empty for a long time once the index is in place," he added.
By Suzanne Fenton
© Gulf News 2008. All rights reserved.
The index will have separate prices for studio, one-, two- and three-bedroom apartments and villas in each community that will help landlords and tenants to benchmark their rents against the published rents in case of a dispute. It will also help the Rent Committee to settle the disputes.
"We are looking at a lot of factors. The index is a guideline for new people who are coming to Dubai," Rera chief executive Marwan Bin Galita told the media on Sunday.
It is hoped the pricing index will act as a comprehensive guideline to all tenants and landlords in Dubai. "The index will be introduced when we're confident that it's going to help the market," Bin Galita said.
By 2009, all new properties and rental contracts for commercial and residential units will be incorporated into a full database of rental agreements in Dubai, he said.
The new rent pricing index, designed to ensure that new people moving to Dubai have a clear picture of how much property is in specific areas, will help the market, he said.
Rising rents, jumping between 50 to 100 per cent over the last few years, have prompted Dubai Government to introduce a 15 per cent rent cap in 2005 - which was lowered to seven per cent - to help the emirate's marginalised middle income group. The rent cap, which managed to stabilise the market to a certain degree, has come under fresh attack with landlords, who were trying innovative ways to bypass it, complaining that they are forced to rent out premises below the market price.
Elaine Jones, chief executive officer of Dubai-based property consultancy group Asteco, said, "It's a huge subject. There is so much disparity in the market now. Some tenants are paying more than double what other tenants are paying within the same building."
Growing fears
Analysts fear the new rent index will be used by the landlords as an excuse to bypass the rent cap. "This will provide another excuse to the landlords to bypass the rent cap," said a property analyst, requesting anonymity. "They have tried all tricks in the past. The rent index will provide the necessary tool for them to try and violate it."
Meanwhile, Bin Galita said there is enough housing supply in the Dubai market but the land is being held by greedy investors and real estate agents.
"There is enough supply in the Dubai market but because of greedy real estate agents or greedy investors, they are keeping the ground," he said.
"New projects are coming so people won't be able to leave their houses empty for a long time once the index is in place," he added.
By Suzanne Fenton
© Gulf News 2008. All rights reserved.
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