In what could be the happiest news for residents this festive season, the Department of Municipal Affairs and Transport (DMAT) on Tuesday reinstated a cap on rent increase to five per cent annually.
The rule was annulled in 2013. The new order will be effective from December 13, the DMAT said.
With this new rule, tenants can now breathe a sigh of relief. And they are in party mood.
"Three cheers to this move. The Abu Dhabi government has heard our prayers. Its difficult situation we are in with increasing rents and school fees, and job instability," an expat Azam ur Rehman said.
Rajesh Tiwari, another expat, said: "This is government's New Year gift."
Due to oil price fall, thousands have been rendered jobless and 'For Rent' for hanging all over the city. And amid all the gaiety, an owner's heart continues to bleed.
"My four flats in two buildings are already empty and I am finding difficulty in finding new tenants. Now this rent cap rule has dropped as a bomb from nowhere. I was in two minds to renew my contract and now I will let go of one flat," an owner, on condition of anonymity, said.
There is more reason to cheer. According to the Cluttons Abu Dhabi Property Market Snapshot for Winter 2016-17, the Abu Dhabi real estate market has experienced further softening in both the residential and office markets.
Head of research for Cluttons Faisal Durrani said: "We have seen a notable acceleration in the residential market correction as a result of increasing global economic uncertainty and the protracted oil and gas sector's decline, building during the third quarter and being further exacerbated as we wait to understand the full impact of Mr. Trump's election as the US President."
"This combined with continued market softening across residential and office markets has led to nervousness amongst investors, with many reluctant to commit to purchases until they see signs of stabilisation. As a result, we have left our forecasts unchanged with a 10 per cent fall in villa values this year likely to be followed by a decline of around 7 per cent in 2017. Apartments will likely be less severely impacted with a decrease of 4 per cent this year and a further -2 per cent to -3 per cent in 2017. The villa rental market will continue to bear the brunt of the widespread slowdown in the creation of senior level jobs, with a 20 per cent drop this year likely to be followed by a 7 per cent to 8 per cent drop next year."
Abu Dhabi, however, continues to have some of the highest rents in the region and world.
By Ashwani Kumar
