Saturday, January 19, 2008

Abu Dhabi's Annual Rent Cap fixed at 5%

The Annual rent cap in Abu Dhabi has been reduced from 7 percent to 5 percent yesterday. This was done to regulate the high rentals and housing crisis in the emirate. The decision is to take effect immediately.

The decision has been issued by the Abu Dhabi Executive Council, based on Law No.20 for 2006, that speaks about landlord-tenant relationship, and aims at curbing the negative impact of high rentals on the emirate's competitiveness, sustainable economic growth and social stability.

Such a move has been initiated in response to recent reports which pointed out an unprecedented increase in rents. The new contract will remain subjected to inflationary pressures, based on factors such as the cost of construction, and shortage of supply.

The Chairman of the Construction Committee, Khalfan Al Ka'abi, said "This is a step in the right direction, and this will have a real effect on residents. However, some more time may be required to solve the housing crisis completely."

Certain units will be delivered this year, but, the majority of the units will be delivered to the market only in 2009, and this supply would ease the market to a great extent, he added.

No comments: