The main United Arab Emirate city of Dubai is studying a proposal to freeze rents for three years after landlords and tenants sign rental contracts, according to the Dubai Land Department (DLD).
The proposed new three-year rent cap is one of the main topics within the new rental law that is under study by various authorities, it was confirmed by the DLD. However, no decision has yet been made.
A DLD spokesperson said: ‘The new rental law and the three-year contract that the Land Department is drafting is being studied by the relevant departments. The new law will be formally issued in the near future.’
The Dubai Land Department did not specify whether the proposal to freeze rents will apply to residential properties only, or if it will extend to other types of real estate such as retail and offices.
The proposal under study comes as Dubai introduces a slew of economic reforms aimed at enticing expats and overseas property investors. Among these measures, the emirate is planning to grant long-term visas of up to 10 years and approved new low-cost employee insurance policies to help retain talent and attract investors.
In changes to foreign ownership laws, investors will be able to own 100 per cent of a company in the UAE – a significant departure from the current policy that restricts foreigners to a 49 per cent stake in entities outside free zones, requiring them to forge partnerships with Emirati stakeholders.
Changes to residency and foreign ownership laws are expected to have a positive impact on the United Arab Emirate property market as more residents seek longer-term housing by buying their homes or renting on longer leases, analysts said.
Overseas property investors considering Dubai should bear in mind that the three-year rental freeze is very likely to become law in the very near future.