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The Abu Dhabi Executive Council has issued a decision to abolish lease contract extensions and the annual five per cent rent increases across Abu Dhabi as of November 10. Silvia Razgova / The National
The Abu Dhabi Executive Council has issued a decision to abolish lease contract extensions and the annual five per cent rent increases across Abu Dhabi as of November 10. Silvia Razgova / The National

Abu Dhabi Executive Council removes 5 per cent rent cap

Landlords will now be able to raise rent based on the rules of supply and demand of the real estate market.

ABU DHABI // The five per cent rent cap for properties in Abu Dhabi has been removed, it was announced last night.

Landlords will now be able to raise rents based on prevailing market conditions.

The Executive Council issued the decision yesterday to abolish the annual extension of the cap on rent increases of five per cent, the state news agency Wam reported. The new rules are effective from November 10.

Real estate managers broadly welcomed the decision, but warned that tenants who had been in a property for a number of years might find their rents greatly increased.

However, as the property market in Abu Dhabi is currently well supplied – with many hundreds more units coming on to the market in the coming months – there was little likelihood of widespread rent rises.

Mario Volpi, managing director of Prestige, a real estate company, said: “It’s a market and if the landlord is going to be really very aggressive and proposes too much, the tenant has the choice [of moving].”

He also thought that removing the cap would help increase supply further.

Ben Crompton, managing partner of Crompton Partners real estate agents, said that he foresaw that tenants “who had been living for decades and paying low rents” would have to pay more.

“Those people are occupying nice apartments and paying low, which means there are fewer apartments for other people. I think tenants need to pay the market price and they should not have an extra advantage because they have took the property 10 years back, he said.


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