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Dubai Property Investment News
Dubai takes action to calm soaring rental costs
As the supply of affordable rental property in Dubai fails to meet the soaring demand, authorities are introducing measures to prevent overheating in the market. Measures include the creation of a Real Estate Regulatory Agency (RERA), adjustments to the current rental cap, the potential introduction of a permit required by landlords before they can let out their properties, and the introduction of three- to five-year rental agreements.
The creation of RERA came as part of Dubai’s 2015 vision, and its purpose is to help to establish an attractive and well-regulated property sector, and to be employed in an advisory capacity and to regulate relevant real estate issues. It has recently been announced that RERA will advise the government on the issue of the current 7% rental cap. The rental cap was introduced for 2007 as a way of calming the considerable increases in rents that some landlords are imposing.
The agency is also preparing three- to five-year tenancy agreements, with the amount and any increases in rent agreed for the period of the contract, so better equipping tenants to deal with rising rental costs. The Land Department in Dubai is also working on a plan to make it necessary for landlords to obtain government approval before renting their property out. Any subsequent rental contract would also have to be officially approved.
The current issues that RERA is facing are a result of the shortage of homes available within the middle- and lower-income brackets. While many luxury properties are coming onto the market, developers are only now beginning to react to the demand for these cheaper properties. There are around 44,000 properties coming on to the market in 2007, according to the International Monetary Fund, and this will not be enough to match the demand. High rents have been one of the major causes of the high inflation in the United Arab Emirates over recent years.
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10-20% pa for 12 years
Contracted income
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capital appreciation
Agricultural land
investment operated by
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