Surprise, surprise! The long awaited and eagerly anticipated rental index has been released to serious criticism.
Gulf News reports that it has no residential prices or criteria mentioned and reports an analyst as saying that it "...is incomplete, flimsy and likely to cause even more confusion in the marketplace as the index is almost incomprehensible."
Another industry insider says it seems to be just the beginning, "almost a pre-index."
The report goes on: "While this must be the first attempt at an index, the lack of solid data is going to cause further mayhem in a sector already riddled with confusion."
It seems to be consistent with the normal procedure - ill-prepared 'information' issued before it's complete causing more confusion than clarification.
So as usual we can expect weeks of further 'clarifications', each probably contradicting the last one, backtracking, U-turns. Meantime the rental free-for-all will continue, endangering Dubai's commercial future.
Gulf News' website doesn't have their story but Zawya reproduces it here.
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5 comments:
You are spot-on once again Seabee.
I also would like to hear some "clarification" (ie truth) about what is happening with the rental cap (currently set at 5%).
Reports in Xpress Magazine today state that the 5% will stand in the abscence of any other official announcement from the Dubai Govt.
However on the same page there is a report that the rental index can now be used by landlords to ascertain fair and reasonable rates for leases.
The only presumption that I can make is that they are failing to clarify the renewal of existing rental contracts as compared to the establishment of first contract tennants. And that the rental index is for new leases (only).
My lease expires in October so this should be sifficient time for some clear guidelines.
I was surprised with today's announcement. I was really expecting something to materialize. I cannot believe they even went through with releasing something as pathetic as this! Honestly, what have they been doing over the past year? All they could come up with was 9 commercial locations and vague categories.
Here's the Gulf News story :).
As usual, different sources get conflicting comments and then interpret them in different ways. It sounds like RERA is continuing to operate as though 5% cap is still in place until told otherwise. The property index is due in about 2 weeks. Here's more comments about the Dubai rent index and rent cap
the 5% cap is in place indeed. but what is on paper is quite different from actuality. rents will favor tenants in 2009, 2010 and maybe even 2011. the market demand will dictate this....think about it from a landlord's perspective and it will all make sense...
While the cost of property in Dubai has been increasing, it is to be noted that compared to international standards the costs are still relatively low. This means that any investment in Dubai property is a chance to rapidly increase capital appreciation by a big margin. Considering the bullish state of the real estate market, any investment in Dubai property over the next few months or years will yield excellent results.
Check this out..
www.dubairentalindex.com
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