The UAE will introduce a rent restriction law that will eventually prevent property owners from demanding excessive rent increases. The move, a welcome relief for the country’s expatriates, comes as property owners have been taking advantage of strong demand for additional middle-income housing by increasing rents by up to 80 per cent in a market where supplies have been short due to the emphasis in investment in the luxury and freehold segment.
Shaikha Lubna Al Qasimi, UAE Minister of Economy, has also pledged to introduce a Competition Law, reported in Gulf News last week, as part of the government’s plan to make the national economy more attractive to foreign investment.
“The UAE, in its initial GATT offer, proposed to allow foreign companies authorised to operate in the UAE to own land and real estate to the extent necessary to conduct their activities in accordance with laws and regulations,” she said. Shaikha Lubna, who last week led a delegation to the World Trade Organisation that reviewed the country’s trade policies, pointed out that the UAE is experiencing major growth.
She blamed foreign factors for the rising inflation in the UAE. The weakness of the US dollar over the last few years has also aggravated inflation. “The major causes behind inflation over the last few years were exogenously determined,” she said. “The international increase in the price of construction materials led to an increase in rental prices. Higher domestic demand generated by regional infrastructure projects was another factor leading to inflation.” She said the UAE government was currently considering several actions to tackle the issue.
The government is also moving towards privatisation of state-owned utilities, specifically those dealing with water and electricity. Shaikha Lubna said the UAE is in the process of amending the Federal Companies Law. “The main amendments relate to removal of the equity capital restriction which is presently 51 per cent of national equity. They will also streamline the authentication procedures by giving investors options to attest through public notaries or registered law firms,” she said.