Abu Dhabi reinstates 5% cap on rent increase

Authorities seek to protect tenants and economy, will Dubai be next?

The Knowledge

Abu Dhabi has reinstated a rent increase cap, four years after canning the rule.

Back in 2013, rental regulators and city authorities agreed to abolish a 5% cap on annual rental increases. This, in turn led to a sharp, unsustainable spike in rental cost, where many properties across the city saw rental costs double – according to Dubizzle.

The emirate’s Department of Municipal Affairs and Transport began the process of reinstating the cap, and on Tuesday April 11 announced that the 5% limit on rental increase is now in effect once again.

It is perhaps of little surprise, with business markets in both Abu Dhabi and Dubai plateauing or in some cases shrinking – coupled with ongoing redundancies across multiple sectors, and the reduction of staff housing/accommodation allowances.

With Abu Dhabi reinstating Law No 20 (the rental cap law), the city hopes to benefit tenants in the centre of the city – largely focused on Al Khalifa Street, Tourist Club Area and Hamdan Street.

One big question remains: will Dubai be next?

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