Monday, a well known agency state news agency specified that Abu Dhabi will keep on increasing cap annual rent at 5%. It was as a part of law issued by Crown Prince Sheikh Mohammed bin Zayed al-Nahyan that the limit was set. 

The news agency said with this law, the maximum period of a tenancy contract gets extended to five years from four. The news agency explained, “The move comes to stabilize the property market as many new residential and commercial units are expected to enter the market.” 

Abu Dhabi has had a 5 percent cap on annual rent increases in place for the last couple years in an effort to control in rental rates, which had hiked vigorously in past few years during the UAE real estate boom. Presently, Abu Dhabi is facing a housing shortage. 

However, after the boom ended due to the global financial crisis, a prominent ease was evident in inflationary pressures, which have also led to an unbalance in property prices and rents across the country. 

Nevertheless, recession has put less effect on Abu Dhabi than its neighbor Dubai, which also holds a 5 percent rent cap in place; however has seen a noteworthy price and rent declines.