Now is not the time for a rent freeze in Dubai property market: Rizwan Sajan of Danube Group

Now is not the time for a rent freeze in Dubai property market: Rizwan Sajan of Danube Group

Home rents - and prices of freehold properties - are subject to demand and supply and other market conditions - and that's why it should be left to the market forces to decide. That is unless things get out of hand due to drastic changes that affects the tenants and regulators must step in. That's the way real estate market functions where the market has achieved high degree of maturity. In those countries, rent laws are formulated to protect tenants rather than the landlords. Usually, the tenants outnumber landlords, and who are perceived to be well off on their own. Therefore, rent laws in the developed markets are seen as tenant-friendly. The real estate market in the UAE, especially in Dubai, has reached a certain level of maturity and, therefore, the regulations should reflect that. Dubai introduced a rent cap around 2005-06 when rents had started to jump exorbitantly due to high demand. Those days, Dubai's economy was growing at around 14-16 percent per annum – thousands of jobs were created every month due to an unprecedented boom fuelled by the real estate and construction sectors. The influx of people far outnumbered the supply of new homes. As a