Average realty rates in Dubai rise to nearly 22 per cent: Asteco report
Dubai has not gone forward with any significant residential rental increases over the last three months, however, average realty rates in Dubai rose to nearly 22 per cent, according to Asteco's quarterly report. This is a big relief for the residents in the UAE emirate as they are getting increasingly disillusioned with steep rental hikes in residential properties.
Matthew Green, research manager at Cluttons UAE, said, "Although current rental growth is lower than it was two years ago, the figures are still extremely high and for many, unmanageable. Unfortunately, we don't see any significant decline in growth rates over the next years as supply will again fail to satisfy pent-up demand."
At the beginning of 2008 the price cap governing Dubai rental contracts was brought down from 7% to 5%, to suppress the inflationary tendencies in the real estate sector. But this has had the side effect of widening the gap in rental demands between established residents and new arrivals to the city. Real Estate Regulatory Authority (Rera) is considering prescribed leases which would run for a fixed term, allowing landlords to then reset rental contracts at, or near, current property market value.
