ABU DHABI // The rent cap that restricts landlords to no more than a 5 per cent annual increase in the capital will remain in place for another year.
Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, this week extended the deadline to November 9 next year.
Leases can only be increased from between nil and 5 per cent, and the tenant must be told in advance of any increase, according to a statement issued by the state news agency Wam.
The move is an extension of a 2006 law that regulates the relationship between landlords and tenants.
Abu Dhabi rents are predicted to fall further in coming months as more keys are handed over on many of the capital's new developments such as World Trade Centre Residences at Central Market.
According to the estate agency CBRE, average rents in Abu Dhabi fell by 6 per cent in the three months to September and dropped 16 per cent compared with the same period a year ago.
Despite the drop, CBRE says Abu Dhabi is still more expensive than Dubai, which introduced a 15 per cent cap in 2010 to stabilise the property market after the 2008 peak in prices, when rents rose rapidly amid the investment boom.