While rents in Hong Kong and Singapore fall, Dubai has joined Bangkok with rents increasing on average 15% in the last year. As the central bank has imposed tighter restrictions on mortgages to try and cool the housing market the rebounding economy and property market has left renters at the mercy of landlords.
Some expats are struggling to reach long term agreements with landlords as landlords look to improve on already impressive yields which are twice the global average. This has led to landlords attempting to get around rules
The Dubai Land Department is rolling even creating a rental dispute tribunal to simplify the way disagreements are handled and increase capacity to around 500 cases a week. Cases that reach the committee are currently charged 3.5% of the annual rent to review a case with the losing side having to pay this.
Currently the Dubai Real Estate Regulatory Agency allows increases of between 5 to 10% based the Rent Index which tracks values across the city. However some landlords are trying to get around these limits by forcing tenants into restrictive contracts or stopping payment of management charges resulting the the suspension of maintenance and services for the property.
The rapidly increasing rents are already becoming a concern expats with allowances being used as quickly as they’re being increased. Rents now range from $46,000 USD to $92,000 USD a year depending on quality and location with a mid-range 3 bedroom home renting for around $58,000 USD a year. This compares with New York where rents only rose 0.2% in 2012.
Jones Lang in a report last month stated that they expected rents to continue to rise over the next 12 months though increases should slow as more properties are completed.