Committee to create a more regulated market: industry analysts
Dubai: The new centre to oversee rent disputes in Dubai in areas will most affect areas with already high rental growth rate, according to Craig Plumb, head of research in the Middle East and North Africa (Mena) for Jones Lang LaSalle.
In the last six months, some of the lower rental areas, including International City and Discovery Gardens, have experienced high rental growth. These two developments have registered “between 20 and 25 per cent [in rental growth] per annum compared to the overall average of 17 per cent [in Dubai,]” Plumb said.
According to Nick Maclean, managing director of real estate consultancy CBRE in the Middle East, some of the residential areas that are expected to be affected by the centre include Jumeirah, Downtown Dubai, and Arabian Ranches.
Meanwhile, the setting up of the new centre can result in more buildings and demand from investors in the long-term, according to Plumb. He added that it “will not make a huge difference in the short-term,” expect for more control over rentals, which will benefit tenants. The new centre can also “encourage more people to register leases,” he said.
According to the Real Estate Regulatory Agency (Rera), which regulates the relationship between landlords and tenants, a landlord can increase rents by at least five per cent and up to 20 per cent, only if the current rent is below the average market rate.
Meanwhile, Maclean said the centre can also help the local property market become “more regulated”.