DUBAI PLANS INDEX TO CONTROL RENTS,MAYBE A GOOD EXAMPLE FOR QATAR TO FOLLOW?
Dubai plans index to control rents
Web posted at: 1/6/2008 3:24:9
Source ::: REUTERS
dubai • Dubai plans to introduce a new index setting a range of appropriate rents for properties across the city, a local newspaper reported yesterday, to control soaring rental prices that are fuelling inflation.
The Emirates Business daily quoted the Real Estate Regulatory Authority as saying that the new index would come into effect on January 15, setting minimum and maximum rents that landlords can charge for properties in particular developments.
Dubai has already set an annual rent cap of five percent for 2008, tighter than last year's seven percent cap and the 15 percent ceiling of 2006.
The caps are aimed at controlling rents that have soared as more expats arrive to live and work in Dubai while real estate developments have been delayed.
The UAE Central Bank Governor Sultan Nasser Al Suweidi has said rents are the main driver of inflation in the second-largest Arab economy, which hit a 19-year high of 9.3 percent last year.
Dubai does not currently have a property index, which means that tenants pay often very different rates for the same types of properties as rents for new arrivals have risen rapidly in recent years.
The index will not just provide a guide to house-hunters concerned that they are being charged over the odds; landlords are obliged to set rents within the stated limits or report to a rental dispute committee, the newspaper said.
EFG-Hermes said earlier this week that the rental cap would have limited impact on curbing inflation because a shortage of housing was the main driver behind rental increases.
In an earlier report, EFG-Hermes predicted that residential property prices would begin to fall in 2009, a year later than initially expected because of a delay in the delivery of construction projects.
Dubai's population is growing at an average of 7.9 percent a year.
There is a law in Sharjah wherein the landlord is not allowed to increase the rent for the first three years of the tenancy contract. And only by 10% every subsequent year thereafter.
Qatar is going to intervene, there are already 4 suggestions being discussed. Private companies and banks hope that the government wont do anything but luckily for us something will be done. When? That's another question.
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I wasn't talking about Qatar...
Unfortunately, you are not right - same as here the state may come up with an answer to a specific issue but that does not mean that all put this into practice.
Landlords suffer from Goldrush and this is not so easy to cure.
They identify a problem and then come up with a plan and see it through to execution... I have real disdain for high ranking officials who merely make observations that such and such is a problem and then don't make any solid commitment to solve the problem.
Its like a lifeguard shouting to a drowning swimmer "YOU ARE DROWNING!!"... He knows he's drowning, now jump in to the water and rescue him...
Yes it definately would, however, I am very scepticle about this as many landlords are greedy and have seen an easy way to make money without thinking of the consequeces not to mention the real estate brookers.
i agree but if they really make it would be a step in the right direction.i hope they will go for it.
:-)
Very interesting information but again I wonder if they will ever pull this through. The small working person will still pay too much for the rent no matter what. I believe!!!