The index, which was compiled during mid-2008, at the height of the property boom and prior to the fall out from the current financial turmoil, is, many believe, slightly out of sync with current rental rates.
The softening in property prices in the Emirate has coincided with a large amount of new units expected to come online in 2009. With prices predicted to continue decreasing over the next few months, Rera is expected to update the index regularly.
Along with the unveiling of the rental index, the Dubai government has issued a statement that rental contracts that were newly signed in 2008 would remain frozen in 2009.
Contracts originally signed prior to 2008 would be given a 25% 'cushion' from the bottom end of index prices. Beyond this, landlords would be allowed to increase leases - up to a maximum cap of 20%.
Two bedroom apartments in Garhoud are, according to the index, leased for between Dhs125,000 and Dhs135,000. Similar units in Dubai Silicon Oasis command between Dhs130,000 and Dhs140,000, while prices in the Marina vary from Dhs150,000 to Dhs180,000.
Four bedroom villas in Mirdif command Dhs230,000 to Dhs250,000, while similar size properties in the Meadows fetch Dhs330,000 to Dhs400,000.
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Dubai Rera's price index
- United Arab Emirates: Wednesday, January 21 - 2009 at 11:08
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The Dubai Real Estate Regulatory Authority (Rera) has unveiled its long-anticipated rental index for average house prices in the city, although many analysts and sector insiders say that the figures compiled are higher than current prices.
The Rera price index reflects H2 2008 rental costs
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Edward Poultney, Editor - EnglishWednesday, January 21 - 2009 at 11:08 UAE local time (GMT+4)
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