Asteco welcomes ceiling on Dubai rents
Regional property services leader Asteco has welcomed the decision to limit rent increases in Dubai, saying the move will boost confidence in the local economy and reassure residents.
Speaking in a radio interview this morning, Andrew Chambers, Managing Director of Asteco, said: “It is good news because it shows that government is listening to people. Prices ultimately cannot exceed what residents are prepared to pay, and the decision acknowledges the natural resistance in the market to big rent increases, which in some cases have been as high as 100 per cent. The decision gives residents a fair deal.”
General Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and UAE Minister of Defence, decreed on Saturday that rents cannot be raised by more than 15 per cent until the end of 2006. Dubai Rents Committee will also review rent increases below 15 per cent should residents contest them.
The move follows the publication of annual research by Asteco last week which showed that residential rents for one, two and three-bedroom apartments in Dubai had increased by 38 per cent on average in the year to October. The cost of office space in Dubai also went up by 29 per cent on average during the period, according to Asteco analysts.
Asteco expects residential rents in Dubai to level off as increasing supply comes onto the market, and Chambers added that rents for one-bedroom apartments are likely to stay at current levels next year. But larger families may still struggle to find a home that suits their budget for some time.
Chamber said: “Much of the supply coming on-stream is for one-bedroom apartments because that is where the speculator market has focused a lot of its attention. But there is likely to be a shortage of three-bedroom apartments, and this situation may be an issue for another two to three years.”
Founded in Dubai in 1985, Asteco is the UAE’s largest property services company. Its services include retail, commercial and residential sales and leasing; strategic consultancy; property management and marketing; feasibility studies and valuations; and research and investment.