'Good development', say agents

source is Gulf News

Dubai: Real estate agents have welcomed the new rule that limits annual increases in rent in Dubai to seven per cent.

The agents said the regulation would be welcome news for tenants who have faced heavy increases in rent in recent years.

Prince Chanai, legal consultant for Al Masah International Real Estate, said the ruling was "a good development".

"This is good as the rate of increase [at the moment] is not commensurate with the salaries of people in Dubai," he said.

"I don't think it would be much of a problem to enforce. If it's the policy of the government, it's enforceable through the Dubai Rent Committee."

"If rents are going to be increased by more than this, then people have the right to object and the rule of law should prevail and in the court all issues can be adequately addressed," he said.

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Ryan Mahoney, managing director of Better Homes, a Dubai-based real estate company, said the rent cap would be good for Dubai.

"Dubai needs this kind of short-term surgical approach to the rental control problem," he said. "Any more than the rents are now is too much."

"People can't afford to accommodate themselves, and businesses can't afford to accommodate themselves," he said.

Mahoney said the current high rents risked dampening businesses in Dubai as companies would look to move elsewhere, and that the decree was probably aimed at protecting the business environment.

"If the government takes steps to protect this city as a viable commercial hub, it would protect the real estate market," he said.

Mahoney said the government does need to be careful that rent caps are only applied as a short term-solution. He said long-term implementation of a rent cap could provide as a disincentive to developing more properties.

Mahoney has little sympathy for landlords.

"This is only going to affect existing landlords," he said. "The good times are already here. The landlords are in a fantastic position already."

Rafat Mattar from real estate agent Eqarat also welcomed the regulation announced yesterday, saying "definitely it's good".

"It's great. It is half of the old percentage increase. That is a good rule," he said.

Samra Usman Adres from Queen Style Real Estate described the new rule as "fantastic" and "very good".

"I know that tenants would be happy about this because everyone is suffering as the rents are very expensive," she said.