Abu Dhabi has re-introduced a 5% rent cap

Abu Dhabi has re-introduced a 5% rent cap

In 2006, Abu Dhabi introduced a 5 % rent cap which later got annulled in 2013, causing a steep rise in rent prices across Abu Dhabi; in fact, some residents had their rent doubled as a result. In December Emirate’s authorities took action to re-introduce the cap as a method of regulating the property market with the intention of helping both, investors and tenants.

A statement sent by the Department of Municipal Affairs and Transport (DMAT) on Tuesday announced that the rental cap outlined in Law No 20 of 2006, which was abolished in 2013, now applies once more.

Abu Dhabi rents for both apartments and villas fell in almost all neighborhoods last year, based on the last dubizzle market price trends report further backed with data from other real estate institutions.

With ongoing redundancies across various industry sectors and the reduction of staff housing allowances, this continues to negatively affect demand in Abu Dhabi with a number of tenants opting to downsize and/or move to more affordable developments.

The rent cap law has come at the right time to help tenants who may be struggling to make ends meet. This will especially benefit tenants in certain older districts in Abu Dhabi’s city center such as Al Khalifa Street, Tourist Club Area, Hamdan Street, where demand remains strong especially for families who’ve resided in building for 5+ years and do not want to spend to shift and commute to newer districts further inland.

Know your rights

It’s important that a tenant is familiar with their rights at all times to prevent being exploited by landlords. The re-introduction of the rent cap will help prevent exploitation and help maintain the overall rent making sure it does not exceed 5% within a year. Click here to visit Know Your Rights page.

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