12 February, 2007

Is Emaar trying to get around the rent cap?

Take a look at this blog.

9 comments:

trailingspouse said...

"Is Emaar trying to get around the rent cap?" I doubt it. Their income from The Greens must be a small blip on their balance sheet. More likely they have decided they just don't want to be in the property management business anymore. However that doesn't help these individuals and they have my profound sympathy.

This further highlights the desperate need in Dubai for proper Landlord & Tenant legislation. I have heard of wildly differing judgements coming from the Rent Committee lately. Some tenants have been given a year's notice to quit, some only given 3 months', etc. What we need are clear written rules outlining the rights and responsibilities of both landlords and tenants.

arse- nal said...

yes,yes they are.

Anonymous said...

It seems to me like Emaar is trying to blackmail residents into buying a massively over-priced product. It's desperately looking for ways to cash in before the bust kicks in properly.

Slagothor said...

An unrelated point: why is it that every time I try to post, I get the "non-secure information" pop-up dialog box. Is it really necessary? I'm not entering passwords or credit card numbers, so why exactly are you using some sort of advanced security protocol?

Having to click that box 2 or 3 times every time I want to make a post is a real PITA. This is the only blog I frequent where this happens. Is this kind of overkill really necessary, or does one of the geeks who runs the site actually think it is an enhancement?

Anonymous said...

No the 7% is too small game for Emaar. Besides who introduced the 7% and who is behind Emaar?

nzm said...

slagothor: it's got nothing to do with the blog administrators - it's a security setting to do with New Blogger.

All the Blogger Comments are now being stored on a secure https server so that's why the message is popping up.

I've never seen it, but commenters to this post on our blog have mentioned it. But I have on occasion seen the https address appear in the URL window when going to comment on other people's blogs.

******************
Going back to the topic, it sounds as if there might be a cashflow issue for someone here, or they're trying a sneaky way to circumvent the fact that they can't raise the rents for existing tenants by more than 7%.

So, this new property company, The Hamptons, is it just another front for Emaar?

If they don't sell the apartments (and on those terms, how many existing tenants could afford/be silly enough to do it?), then they'll most likely be "sold" in bulk to another property company (most likely also related to Emaar) which will hike the rental price up (by more than 7%) for the tenants.

B.D. said...

There are some who argue against rent caps in favor of free market fluctuations, saying that artificial controls don't work, and if anything exacerbate the situation. Could this be an example of that? As merciless as the double-digit rent rises of the past couple of years have been, wasn't (isn't) it just a matter of time before supply exceeds demand and those rate increases begin to reverse?

Perhaps it is this potential reversal in market conditions that Emaar is responding to, or they have made the prudent (if not pleasant) business decision to get around the artificial 7% cap.

Personally, I think Dubai gov made a mis-step in following the lead of Abu Dhabi with a 7% cap. The market should be let alone on a relatively long leash. The 15% cap seemed a much better way to meet people on both sides of the issue half-way

Slagothor said...

BD:

You're correct. Legislating against fundamental economic forces is a bit like passing a law against gravity. No matter how good the intentions of the lawmakers, and no matter how much they *want* it to work, it won't.

Taunted said...

I'm with ananymous @ 12 February, 2007 08:48 .

Emaar know the bubble will burst very soon, (end of 2007 latest) and need to cash in asap.

You want to buy an off-plan in the lagoons? 40% off list to you sir.

Seriously.

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