ABU DHABI // Abu Dhabi is to launch a residential property rental index as early as next month.
Abu Dhabi island will be divided into 10 to 12 zones according to rent levels. The index will set a guide rent for each zone based on market data analysis.
The aim of the index is to establish rents that are fair to tenants but also provide a return for investors, and settle any disputes between landlords and tenants, Al Ittihad, the Arabic-language sister newspaper of The National, reported on Sunday.
A source told Al Ittihad that since the 5 per cent cap on rent increases in Abu Dhabi was removed in November, some rises had been excessive.
Jones Lang LaSalle reported last month that the average annual rent for a selection of two-bedroom apartments it monitors in the capital increased from Dh120,000 at the start of the year to Dh130,000 in the second quarter and then to Dh140,000 in the final three months of 2013.
The source told Al Ittihad that according to available data from property companies, more than 10 per cent of residential apartments on Abu Dhabi island, 20,000 homes, were unoccupied, This means anyone looking for a home should easily be able to find one that matched their income.
He said official data showed that the supply of residential apartments in Abu Dhabi exceeded demand, which would automatically limit unreasonable rent increases.
The government bodies compiling the index are the Department of Municipal Affairs, the Department of Economic Development, the Urban Planning Council and the Abu Dhabi Council for Economic Development.
Dubai’s Real Estate Regulatory Authority, Rera, launched its rent index in 2011. It provides residents with a guidance mechanism for settling rental disputes.
House prices in Dubai rose by an average of 22 per cent last year, with less dramatic increases forecast this year, according to Jones Lang LaSalle.
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