Officials 'not aware' of plan to drop rent cap

Officials in Abu Dhabi yesterday said they could not confirm reports that the emirate plans to lower its rent cap from five per cent to three per cent. Recent media reports said the Executive Council was studying a proposal to reduce the annual rent cap to control rampant rental inflation. But Eid al Suwaidi, the head of the financial planning and reports section at Abu Dhabi Municipality, whose department monitors rents for municipal buildings, said he was not aware of any such proposals. "We didn't hear anything new about this subject," he said. "I think during this time there is a demand because the market is big, so every time the rent is going up." Zuhair al Qadi, a spokesman for the Abu Dhabi Chamber of Commerce, said he would welcome such a step. "It would be good news for us," he said. "I wish they would freeze it." Unlike in Dubai, where the increasing supply of properties to rent is helping to control rental inflation, the capital has a severe shortage of vacant units. In June, rents for apartments were up an average 49 per cent year on year, as the continuing scarcity of supply gave landlords free rein over rates, according to a report by the property services company Asteco. [e-mail]