Rents have been a long time debate in these parts, with increases in the past year alone around the 40% mark. Complete and utter lunacy. Basically, you were paying 15% of the value of the place you were renting. Sickening. To boot, there was no rent controls, committee, recourse until a couple of years ago when they introduced rent caps. It started at 15%, was reduced the next year to 7%, then finally 5%. Your contract was protected for two years. Essentially, you pay one arm and one leg now, then next year another arm and another leg, then after the second year, the landlord could charge 5% more. Simple, right? (except how you would get another 5% of an arm/leg, but I digress)
Residents rejoiced now that unscrupulous landlords were leashed. I had a battle myself and came out ahead. Well, just today, the head of RERA (real estate governing body in Dubai) announced that there is no more rent cap.He feels in these economic times is not necessary. "Rent caps are not needed in a tough year". What the fuck is he talking about? Is he smoking glue in that pipe? How can you make decisions with your head so firmly up your ass? Jesus.
What this means is the following: If you have been renting for multiple years at a "reasonable rent", the gloves are off now. Although the landlords will not get the INSANE rents of yesteryear, they will certainly want to bump up their revenues. I have a friend who is renting a villa in Mirdif. It is a 3 bedroom + maids, 3 bathroom place. Very decent. He pays 93,000 AED per year, and has been there 5 years. Now market rate for this place a few months back would be 240,000AED, now he won't get that much, but he could certainly get 175,000AED for it. What this dicksmack at RERA has done is essentially legalize gauging to allow all these rents to be increased. There is absolutely nothing in place now to prevent the LL for effectively doubling the rent. Hold on to your hats, it's going to be a bumpy ride. Article below....
Rera chief executive says rent caps are not needed 'in a tough year' |
By Suzanne Fenton, Staff Reporter |
|
Dubai: A rent cap is not needed this year, Marwan Bin Galita, chief executive of Dubai's Real Estate Regulatory Authority (Rera), told Gulf News. Many tenants in Dubai are still confused that no rent cap for 2009 has been announced. While the cap for 2008 was set at five per cent, this was due to run out at the end of last year. Since then, nothing more has been said on the issue. However, Bin Galita told Gulf News on Monday that in his opinion, no rent cap is necessary in 2009. "We don't need a rent cap this year. We need to freeze everything. 2009 is a tough year and we shouldn't interfere with rents too much," Bin Galita said. Bin Galita also said rental rates should be fair to both landlords and tenants. |
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3 comments:
Bastards. If it's a tough year then the rental cap is not hindering anything because rents wont rise much anyway. All this does, like you say, is screw those who have locked in a good cheap rent.
There will be a lot of people getting a rude shock. 2005 price is a hell of a lot different to 2009 price.
Love how the RERA guy says we need to freeze things. No freeze mate, they're going down. Hit the floor please, I need cheaper rent :-)
The rent freeze isn't really a rent freeze, it's a scale of rent caps depending on your rent level. Here's a rent cap calculator to work out the rent cap - enter your rent, and the Dubai average rent limits for that area. I'd appreciate any feedback so it can be improved. Thanks :).
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