Dubai is set to see a freeze in real estate rents after its ruler ordered they should remain the same for tenants who renewed contracts in 2008.
Officials have said the drastic step has been taken in order to stop increases in real estate rents getting out of control. The director of the Dubai ruler’s court, Sheikh Mohammed bin Rashid Al Maktoum, said the idea was to keep a healthy balance between the needs of landlords and tenants.
The move is also aimed at maintaining stability in the real estate sector, with demand currently undergoing a slowdown.
According to Gulf News, the law says rents cannot be
“raised this year so long as the rent in 2008 is equal to or up to 25 per cent lower than the average market rate”.
Last week Dubai’s Real Estate Regulatory Authority (RERA) issued a new guideline rental index, which is expected to replace an existing property rent cap system.
Although RERA has issued a point system for working out the rental value of a property, the average rents have not yet been determined.
Last week Dubai’s real estate market added a string to its bow after the emirate was listed as having a high level of potential in the Middle East. A run-down by fDi magazine put the state top in terms of likely future developments, with many of its top property projects helping the high rating.
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Good move.There is a recession in dubai.Rents have started declining.If the rent decreases,investors will won’t show intrest.This decision is for sustaining the current market and from saving the market from current recession.