Abu Dhabi Freezes Rent: Will Dubai Follow Suit?

**Tim Elliott** (0:00)
It's the Morning Drive, it's Mira Business FM, and it's a very warm welcome back to our, actually, two titles to date, Mario Volpi, real estate expert, goes without saying.
Senior manager at Eva Real Estate now as well. New position.

**Mario Volpi** (0:16)
Yes, thank you. I've joined your family.

**Tim Elliott** (0:19)
Yeah, I know. Well, Eva comes under Mira, that's the umbrella, isn't it? I guess, okay. So, does that mean, it's been concerning me ever so slightly, that maybe I have to be a bit nicer to you now?
I don't know.

**Mario Volpi** (0:33)
Well, I know your boss. Yeah, I know. So, yes.

**Tim Elliott** (0:36)
Okay. Lovely to see you. You look fantastic as well. Oh, wow.

**Mario Volpi** (0:40)
Okay. Yeah. Well, the weather was great in London.
So, actually, I managed to sort of top up the tan. Yeah, it was 30 degrees, 33 degrees, in fact. I think it was on bank holiday Monday or the Tuesday, which actually beat all the records since 1922

**Tim Elliott** (0:56)
That's right. And loads of English people melted as well.

**Mario Volpi** (0:58)
They did. Any bit of grass, there was someone sitting on it and having a picnic.

**Tim Elliott** (1:04)
This is the thing, if you've ever been to London and or ever lived in London for any length of time, as soon as the sun comes out, everybody's in the park, and every guy takes his top off. Yes, that's right. Is that part of the Constitution?

**Mario Volpi** (1:20)
It's a sight to behold.

**Tim Elliott** (1:21)
It's not necessarily a great thing. Well, it's nice to have you back.
There's one big story I wanted to start with today. And you sent me this yesterday, and this has only been out for an hour or so. We hadn't really heard anything about it. But this is Abu Dhabi capping rents. It just happened yesterday.

**Mario Volpi** (1:40)
Yes. Actually, I was contacted by the National.
National is an Abu Dhabi paper wanting my comments. So I have to say, I was surprised when I saw it, because Abu Dhabi always, when it came to sort of rental caps, when it came to sort of these platforms, they always let the market play out.
They never really interfered when prices were going up or when prices were going down. They always let the market play out. So now to sort of put this cap of no increases at all, which by the way is obviously from a tenant's point of view is welcomed, but I found it surprising because they've interfered or they've involved themselves when in the past they never have. And so that's why my initial reaction was of surprise, but then sort of thinking about it, good news for tenants. I'm not so sure it was good news for the landlords though. Although stability is clearly the key in all of this, in a time of uncertainty, tenants can now budget better. They know that at renewal, because they haven't put a timeline on it, they've just said for the foreseeable future, which obviously could change at any time clearly.

**Tim Elliott** (3:05)
Yeah.

**Mario Volpi** (3:06)
But I thought, well, what about the landlord then? Because a lot of these people have bought properties with a view obviously to rent them out, to get a good return on investment. That has now put a full stop on that. But the landlord still will have to pay the same mortgage if he's got a mortgage on it. So his costs won't necessarily go down or stay the same, unless of course they have a fixed rate mortgage. And then I'm starting to think about the service charges that landlords obviously have to pay.
Is there going to be a cap on those? To then help the landlord. So on the face of it, as a tenant, great news at renewal, you're not going to be able to have an increase if you're a landlord, and good news for a tenant. But it's a little bit, it's not balanced is what I'm trying to say. Now, unless they then bring out other things, and maybe this is just one of several things that the Abu Dhabi government are going to introduce.
I mean, any sort of price hikes like this, or a curb on price hikes is good, because it will curb inflation as well. It will stop that if there is any, from a financial point of view, if there's any increases there. But yeah, I mean, again, it just shows you that decisions can be made overnight. We've talked about that many times. In this case, we're talking about Abu Dhabi.