With this resolution and its effectivity from January 13,2008 has been taken under law no. (20) issued in November 2006 regarding rents and rental relations between the occupant and tenants in the emirate.
The adjustment, the council said, seeks to bring greater stability to the real estate market in a way that limits the inflationary effect of rent rises and their impact on the competitiveness of the emirate, economic growth and social stability.
The need for such a measure stems from the strong economic growth Abu Dhabi has experienced in recent years, along with rapid, successive jumps in the demand for residential and commercial real-estate.
Consumer price data for the emirate has suggested that apartment rent rises have been the main engine driving the unprecedented levels of inflation that Abu Dhabi has recently experienced.
Analysis of the data by the government suggests that more than 50 per cent of the increases in the consumer price index over the last reporting period were due to the raising of rents.
However, the government believes that rental caps should be viewed as a temporary measure.
In response to the increasing growth in the demand for real-estate in the emirate, the government of Abu Dhabi is now overseeing the implementation of significant urban development projects, within the framework of a comprehensive urban plan.
As a result, large numbers of residential and commercial properties will become available in the short and medium term.
It is envisaged that once complete, this development will help create balance in the real estate market, more effectively matching the supply and demand, and enable the market to function without the need for further government intervention.
