The practice is that landlords try to find mechanisms to increase rent. So our responsibility from when we were established in August was to regulate all rental agreements. We looked at the market and along with the government we decided that a further rent cap, as an instrument to stop the value from rising, should be implemented because the rental prices are already high.
Any contract signed in 2007 or any contract signed in 2008 or at the end of 2006 cannot increase the rent for two years. People will feel more secure about renting now, both those people already living here and those new to Dubai.
It’s also good because some people have had pay rises and they will not have to give it all to rent. If a property is under the market value then a landlord can apply to increase the rent. Real estate agencies should act responsibly and professionally but at the moment some of them are not and these measures will push them to do so.
Next week the Real Estate Regulatory Authority (Rega) will issue a rental index giving details of properties in certain areas of Dubai based on their location, age, condition and the facilities they have.
Marwan Ahmed bin Ghalita is CEO of the Real Estate Regulatory Authority. He was speaking to Adrian Murphy.
A new rental cap: the need of the hour