In the first week of January 2008 the Dubai Land Department announced the reduction in the annual rent cap for 2008 from 7% (seven percent) to 5% (five percent) of maximum rental increase per annum. For any new tenancy agreements, landlords are able to command the current market value but for renewals in 2008, the increase is limited to five per cent.
The government of Abu Dhabi also reduced the annual rent cap from 7 per cent to 5 per cent. The Abu Dhabi Executive Council issued the decision on 13 January 2008 which takes effect immediately. The decision, based on law No. 20 for 2006, which regulates the relationship between landlords and tenants, aims at curbing the increasing rents in the capital, and its negative impact on Abu Dhabi"s competitiveness, sustainable economic growth and social stability.