Dubai considers three-year rent freeze
If you are looking for a Dubai home, villa or furnished apartment for rent, you need to know about the three-year rental freeze that the Dubai Lands Department (DLD) is considering. The proposal is mainly about adding a provision to the lease contract that requires the tenant to stay in the rented place for three years. Although DLD is still considering and reviewing the three-year rental freeze, if you are a tenant or landlord, it is important to know more.
Why should we consider freezing three years of rent?
In the past few years, Dubai has seen a lot of real estate construction and development. Supply in residential areas has increased, but demand has slowed. According to one study, rent prices fell by 11% compared to last year. This applies to apartment and house rents in Dubai. If this trend continues, Dubai’s real estate market may be affected. The landlord will be forced to lower the rent. A reduction in income means encouraging fewer people to make new investments.
How can the three-year rent freeze help?
DLD believes that the three-year rent freeze is one of the ways to solve the current problem. It is not only beneficial to the landlord but also beneficial to tenants.
Through a three-year contract, the landlord can earn income for three consecutive years. In short, freezing rents gives homeowners a guaranteed return on investment and sustained cash flow.
On the other hand, tenants will have a fixed rent for three years. This helps tenants avoid the effects of rising rents and contributes to budgeting. Both the landlord and the tenant can save more time and money because they only need to renew the contract every three years.
Really need it?
Some experts believe that three years of rent may not be needed so far. While it may encourage financial stability for landlords and tenants, it can lead to other potential problems.
Take the studio in Dubai as an example. A couple may have an extra family member and therefore need a bigger place to stay. The couple may be forced to leave their rented studio and look for another place. This can happen before their three-year contract expires.
The three-year term is actually a long period of time. There may be unforeseen changes in the tenant’s life that may affect the contract. For some tenants, a three-year rent freeze may be considered too rigid.
In addition, landlords and tenants can always choose to negotiate and agree on terms and conditions. They can still prepare a contract to provide a win-win solution.
Get professional help
The DLD is reviewing the three-year rental freeze. Whether they approve or not, it may have an impact on the real estate market. If you want to know more about the Dubai real estate market, or if you are looking for a place to stay, then you will love talking to Rocky Real Estate. With decades of experience, they have the necessary expertise to help you make the right decisions when choosing a rental property in Dubai. Call them today