Dubai New Tenancy Act Presents Drastic Changes
Landlords, especially the big ones, are starting to ask for a 5-15 per cent rental increase on new contracts so that they can better absorb Dubai’s upcoming three-year rent freeze on new tenancies. The new law is still in the draft stages, but represent one of the biggest changes ever for the emirate’s residential rental market. By asking for higher rents now, these landlords expect to be better positioned to handle the non-hike period and the higher costs associated with the maintenance of their properties during those three years. The increased rents are being asked for in-demand villa and townhouse communities and also in the super-premium apartment category. In return, these landlords are once again willing to offer an extra month or two as rent-free or offering free air-conditioning. There is also flexibility on the cheque payments. What landlords are trying to avoid at any cost is enter a new tenancy contract and then find they do not have the flexibility to ask for higher rents if the market suddenly picks up. (At the top end of the rental market, there are already signs that rents are on the increase.) The next six to eight weeks is expected to see increased leasing activity as residents take a decision on whether to shift from their current premises or retain their contract. Asking for high rents now comes with a certain element of risk for landlords, more so as asking rates remain is still under heavy pressure within the wider market. For the mid to more affordable rental options, landlords of these properties are in no position to ask for more – until demand stabilizes.
Tags : INTERNATIONAL residential Real Estate Landlords rental market Dubai New Tenancy Act