It’s business as usual for Abu Dhabi under rent cap
It’s business as usual for Abu Dhabi under rent cap
First cap on rentals since 2013
The Abu Dhabi property scene is still reckoning with the government’s decision to impose a rental cap for the first time in three years, The National reported.
Some thought the move redundant, seeing as rental rates across the UAE have been on a downward trajectory due to slumping petroleum prices.
“I’m not sure whether there is an actual need for it now or for the next 12 months because rents are falling,” Edward Carnegy, who heads the Abu Dhabi branch of property consultancy Cluttons, told The National.
Rents for existing tenants across the emirate are now capped at 5 percent per annum, the Department for Municipal Affairs and Transport announced two weeks ago.
More: Abu Dhabi rents spike, Dubai rents drop
Average Abu Dhabi apartment rents in November stood at AED129,000 (USD35,100), a 1 percent drop from the previous month, property portal Bayut.com reported.
“I think possibly the effect of the reintroduction of the rent cap could be that rents start to stabilise next year,” Andrea Menown, head for investment sales at property broker LLJ, told The National.
“At the moment we are seeing that it is the larger and more expensive properties which are seeing the biggest falls in rents. This is the case especially for villas, both privately owned and in compounds, as well as higher-end apartments on Reem Island where tenants have been re-evaluating their cost of living or been affected by job losses.”
The Abu Dhabi government introduced a rent cap in 2006 at 7 percent per annum. It was adjusted to 5 percent in 2010 and finally eliminated altogether in 2013.
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Source: Property Report