One might as well move to Dubai now, Abu Dhabi scraps rent increase cap
Abu Dhabi has decided to scrap a five per cent cap on annual rent increases, the emirate’s top decision making body said, opening up a property sector where many are paying below current market rents.
The Abu Dhabi Executive Council issued a decision to cancel the extension of the annual five per cent rent increase rate as of November 10, the official news agency WAM reported late Thursday.
The United Arab Emirates capital slapped a five per cent cap on annual rent hikes in January 2008 after surging demand drove rents higher and inflation with them.
“Many are paying rents under-the-market rates, so in some cases rents may go up. But with more supply now and competition it is laid more open to market forces,” said Matthew Green, head of research at property services firm CB Richard Ellis.
Prime residential rents for new leases in Abu Dhabi were flat in the second quarter of this year after growing eight per cent in the first quarter, whereas secondary residential rents continued to fall, according to property consultants Jones Lang LaSalle.
Demand growth driven by government spending and regulations to reduce commuting from Dubai has been partially offset by continued additions to supply, Jones Lang said.
Last year, Abu Dhabi pressed public sector employees who reside outside the emirate to relocate within its borders, a policy which analysts said aimed to address heavy oversupply in its real estate market.
- House hunting in Dubai? Budget friendly options may be available in the near future
- Why Dubai is NOT building more hotels for World Expo
- Another tipping point for the ME: 'smart' urban development
- Dubai residents blame 'Expo 2020' for extortionate hike in rent rates
- A breath of fresh air: is Jordan's economy about to thrive off real estate?
- Highest increase in residential rent recorded in Ajman
- Supply fails to meet demand for residential real estate in Abu Dhabi
- A blessing or a curse? rental gap between Dubai and Abu Dhabi narrows
- Rent prices in prime Abu Dhabi areas up 17% in 2013
- UAE: One bedroom apartments record highest rental increase