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Regulating rents in Abu Dhabi
Authorities in the emirate have passed a decision to keep rent increases capped at 5 percent, even as reports suggest that Abu Dhabi’s rental market is stabilizing.
November 17, 2009 1:21 by Aarti Nagraj
Annual rent increases in Abu Dhabi will remain capped at 5 percent, according to a new decision passed by officials, reports the UAE’s news agency WAM. According to the decision, the period of a tenancy contract in the emirate has also been extended from four to five years.
“The move comes to stabilize the property market as many new residential and commercial units are expected to enter the market,” says the report.
According to the third quarter report by property consultancy Asteco last month, almost 1,000 new apartments were delivered to the Abu Dhabi market in the previous quarter. The new units mostly came up in off-island locations, including Mohammed Bin Zayed City and Khalifa City, the company said.
Rents in the emirate declined between 5 and 10 percent during the third quarter of 2009, CB Richard Ellis (CBRE) said in a report published earlier this month. Rental rates in the center of Abu Dhabi fell approximately 5 percent during the period, and rates of units located off the island fell between 8 to 15 percent. However, rental rates in some areas, such as the central business district, did not decline, the report said.
Office rents fell by 3 to 17 percent during the quarter, the report said, down 40 percent as compared to the third quarter of 2008. “Despite healthy market fundamentals, unfavorable impacts of the crisis became more noticeable. Demand dropped sharply with agents finding it increasingly difficult to lease new commercial space,” the report said.
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