Capital gains

Abu Dhabi's maximum rent rise set at 5% Discuss this article

Officials have ruled that the maximum annual rent increase on properties in Abu Dhabi will remain at five percent.

The rent rise limit was announced as part of a new law issued by Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and reported by news agency WAM.

The regulations also state that tenancy contracts can now be issued for a maximum of five years instead of the previous four.

Officials said the move was an attempt to "stabilise the property market" as many new residential and commercial units were expected to open in the emirate during 2010.

The Executive Office also said a panel would be set up to study the "economic and social dimensions of the legal regulation of the tenancy contracts".

It will analyse the economic impact of any amendments on tenancy contracts and the property market in the UAE capital, WAM added.

Rents in Abu Dhabi have remained stable or have even increased slightly because of a lack of supply, while prices in Dubai have plummeted.

In both Dubai and Abu Dhabi, landlords cannot increase prices by more than five per cent a year for the period of the tenant's agreement. In Dubai, they are barred from increasing rents at all for the first two years, reported UAE daily The National.