Abu Dhabi has capped annual rent increases at five per cent  and extended tenancy contracts stipulated in the rent law to November 9, 2013.
The move will help further increase stability in the rental market in the emirate in the coming year. This is necessary as rents in Abu Dhabi, which were prohibitively high because of a shortage of units, are now expected to ease as new developments come on line. The resolution should reduce price volatility by providing clear margins that give landlords room to increase their income to meet necessary expenses and tenants with a predictable rise in rent.
While markets must be regulated with a light hand, volatility is often more damaging than price increases as it makes budgeting difficult and undermines businesses and consumer confidence.
Reasonable, affordable housing is an important part of the good living standards which make the emirate a destination for professionals and direct foreign investment, which contribute to its economic development. The rent cap will help provide the economic stability which is necessary for growth and development.