The cost of renting a one-bed apartment in Dubai did not rise at all during the last three months of 2008, according to the latest quarterly report from property services firm Asteco.
And in Abu Dhabi, rents for units with two or three bedrooms also levelled off with analysts expecting a period of rent stability in 2009 after rapid increases in the last few years.
'Certainly for the next three to nine months I don't think there will be anything that will cause a move back to rapid inflation,' said Andrew Chambers, the managing director of Asteco.
Average annual rent for studios, and apartments with one, two and three bedrooms in Dubai were 80,000, 123,000, 165,000 and 243,000 dirhams respectively. But in the villa sector cost are continuing to rise with an 8% increase in the average rents for villas in Dubai between the third and fourth quarters of last year.
The report is published just days after Rera, Dubai's property market regulator, said a rental index would soon be released and to provide price bands for various types of property in different areas of the city with minimum and maximum prices.
But the introduction of a rental index in Dubai will have no effect on curbing the spiralling cost of rents, according to new survey. Almost 45% of those questioned in the poll for Arabian Business said that the rental index would fail to reign in unscrupulous landlords because the regulator will have no powers to enforce it.
The index, which has been drawn up by the Real Estate Regulatory Agency, is awaiting approval by the Dubai government and is set to be released at the end of this week.
The poll also showed that around 39% believe that the index will stop one-off extortionate rent hikes, but would have little impact on overall rises, while 11% thought the move would improve the overall situation as tenants would have more power to challenge unfair hikes. However, only 5% think it will solve all rental problems.
