No increase in rental values in 2009

[Fran]

Vice President and Prime Minister of UAE His Highness Sheikh Mohammed bin Rashid Al Maktoum has, in his capacity as Ruler of Dubai, issued a decree that provides for halting any increase in residential and non-residential property rent values in 2009 for the tenants who renew their contracts signed in 2008, said the official news agency WAM.

The decree number (1) for 2009 stipulates that the rental value must be equal to, or less than 25 percent of the corresponding rent in the average annual rent index.

The decree also defines a new formula for lower rent values which allows a proportional increase in rents for 2009. According to the new formula, the increase in property rent will rise in proportion with the drop in 2008 rent value in the average annual rent for the same property.

The corresponding rent is the rent value of the property unit in the average annual rent index, created by the Real Estate Regulatory Agency (RERA).

Mohammed Ibrahim Al Shaibani, Director of the Dubai Ruler’s Court said the decree was aimed at curbing the growing increase in property rent value in the emirate to maintain a balance between the interests of both landlords and tenants and to ensure stability of the real estate sector in a way that will reflect positively on the emirate’s comprehensive development plans.

 

[georgihh]

Vice President and Prime Minister of UAE His Highness Sheikh Mohammed bin Rashid Al Maktoum has, in his capacity as Ruler of Dubai, issued a decree that provides for halting any increase in residential and non-residential property rent values in 2009 for the tenants who renew their contracts signed in 2008, said the official news agency WAM.

The decree number (1) for 2009 stipulates that the rental value must be equal to, or less than 25 percent of the corresponding rent in the average annual rent index.

The decree also defines a new formula for lower rent values which allows a proportional increase in rents for 2009. According to the new formula, the increase in property rent will rise in proportion with the drop in 2008 rent value in the average annual rent for the same property.

The corresponding rent is the rent value of the property unit in the average annual rent index, created by the Real Estate Regulatory Agency (RERA).

Mohammed Ibrahim Al Shaibani, Director of the Dubai Ruler’s Court said the decree was aimed at curbing the growing increase in property rent value in the emirate to maintain a balance between the interests of both landlords and tenants and to ensure stability of the real estate sector in a way that will reflect positively on the emirate’s comprehensive development plans.

No increase but decrease and doesn’t come from the sheik comes from the reality

 

[PropGuy]

No increase but decrease and doesn’t come from the sheik comes from the reality

but many landlords are not decreasing. Actually, few companies I know received rent hikes for the new year for the facilities they are renting.

 

[georgihh]

but many landlords are not decreasing. Actually, few companies I know received rent hikes for the new year for the facilities they are renting.

Not for long – business is dead in Dubai – DSF is a disaster.
Two more months and no way out – this is serious

 

[Fran]

Yesterday I met one friend of mine and in the course of conversation began talking about the crisis. He laughed and said : " The crisis is in the mind!"

As for the DSF: the malls are full and the Global Village too.
As for the decree, I am puzzled (mild expression).

 

[Design Architect]

Question

Not for long – business is dead in Dubai – DSF is a disaster.
Two more months and no way out – this is serious

Hi Georgihh,

I totall respect people and their own opinions, even if I don't necessarily agree with them, but I wanted to ask you this question for a while:

- Do you own a property in Dubai, and if you do, where?
- Do you own a shop in Dubai, and if you do, where?
- Do you own your business and if do, what?

It looks like you have lost a lot of money in this market, and that your business is suffering.
If this is the case, I totally understand you, and I feel you buddy.
If this is not the case, than I don't understand why are you so bitter.....

Anyways, best of luck
Dimitry

 

[Fran]

I think that georgihh doesn't own anything, but is sick jealous of the people who do own and that's why is trying to bring them down with poisoning comments.
Very annoying indeed...

 

[georgihh]

I think that georgihh doesn't own anything, but is sick jealous of the people who do own and that's why is trying to bring them down with poisoning comments.
Very annoying indeed...

Here you go, my secretary (Fran) answer to your questions.
She is so wealthy that she works for free.

 

[Hussein Awadh]

No increase but decrease and doesn’t come from the sheik comes from the reality

Dubai ruler issues decree to freeze rents in 2009

by Andy Sambidge on Monday, 19 January 2009

RENTAL CURB: Dubai's ruler has issued a decree to stop residential rent increases in 2009. Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum on Monday issued a decree stopping any increase in rents on residential and non-residential properties in Dubai in 2009 for tenants who renew their contracts signed last year.

Mohammed Ibrahim Al Shaibani, director of the Dubai Ruler's Court, said the decree was aimed at curbing the growing increase in property rents in the emirate.

He said it was aimed at maintaining a balance between the interests of both landlords and tenants and to ensure stability in the real estate sector, reported news agency WAM.

The new decree also appears to hand greater power to landlords who have complained that, in certain cases, the five per cent rent cap has kept the rents they can charge well below normal market levels.

The decree says that rents for both residential and commercial units set last year are frozen – unless they are more than 25 per cent below the guideline figure recommended in Dubai’s new rental index.
Last week, Standard Chartered bank predicted that rents in Dubai were "unlikely" to rise in 2009 because of the weakness of the labour market.

In a report published, the bank said "demographic and employment" levels were key to determining rents.

The study came as Dubai's Real Estate Regulatory Authority (Rera) revealed it had finalised its rental index that it hopes will replace the need for rent caps in the future.

The Standard Chartered report added: "Our view is that rents are unlikely to increase in 2009 (making the cap unnecessary) not because of the falling housing prices but because of the reported weakness in the labour market."

refered by ...... -> http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=544141

 

[Hussein Awadh]

Yesterday I met one friend of mine and in the course of conversation began talking about the crisis. He laughed and said : " The crisis is in the mind!"

I absolutely Agree. It's only a crisis if you want it to be.

As for the decree, I am puzzled (mild expression).

It's to give people confidence that they can still rent and not have to worry about too much of an increase during this year of "Crisis". They're trying to stop people from leaving. If land lords didn't have a rental index they'd have raised it crazily, and even with the new rental index being 45% above the value of rent already paid (In TECOM for example) the landlords would have risen the rent by that percentage. The 25% is to satisfy the Landlords for this year, and the freeze for tenants.

But not everyone see's it that way.

 

[Wannaberich]

I dont understand the rental index.If a landlord is renting his property for 25% less than the recommended price,can he then put it up to this price?Or can he only increase it by only 5%
which is the current cap?

 

[Hussein Awadh]

Well according to what I read, it's not as clear to me yet, if the RERA decide that a certain Building 1 BR should be rented no more than 100k and someone there is renting it for 45k, then the Landlord can increase the rent by 25% during this year only. However, if the decree wasn't placed he would be capable of increasing it from 45k to 100k in one go.

Not sure though, someone correct me if I'm wrong.

 

[PropGuy]

I dont understand the rental index.If a landlord is renting his property for 25% less than the recommended price,can he then put it up to this price?Or can he only increase it by only 5%
which is the current cap?

What I understand is that if rental price less than 25% then he can only increase up to where it becomes -25% to recommended price. If it is too low lets say 50% below then rent cap is still there. Landlord can't increase more than rental cap.

 

[aveshbachav]

ATTENTION ALL,

It seems to me that we and the media is unaware that the residential rental index was released along with the commercial one. I just visited RERA and got a link where in I found the following for free hold property.

Welcome to the Official Dubai Real Estate Community

You will get an excel sheet, browse through the different tags in the sheet, I know tags are all in Arabic but there is index for deira, karama, commercial, burj dubai and one for freehold property.........


For Intl City, the index for studios, 1 BR and 2BR are 45-55K, 65-75K,85-90K respectively.



I do not understand what the new decree by Shaikh Maktoum would mean wrt to the index for freehold properties. We need serious discussion among ourselves.

 

[Wannaberich]

Rental Index
Long-term tenants still facing rent hike in 2009 - Real Estate - ArabianBusiness.com

Click on 'rental index' in blue writing to see figures.

 

[Wannaberich]

It doesnt say if its 25% below the minimum price index or the max.For example Arabian Ranches is 250-280 for a 3 bed.I know someone who has one of these renting at 190.
250 is 24% less.Does that mean when the first year contract is up the price can be brought up to 250?

 

[pisandre]

As for the DSF: the malls are full and the Global Village too.
.

I am afraid you are kidding. Go have a look at Burjuman. Shops are empty, bro. No queue anymore for the taxis...