How Will Dubai's Smart Rental Index Transform the Rental Market?

The new Dubai Smart Rental Index is a game-changer for the market and a real win for both tenants and landlords. It aligns with Dubai’s ongoing Digital Strategy and the Dubai Real Estate Sector Strategy 2033 objectives.

The index integrates the latest technologies and real estate expertise, aiming to provide a service that meets the needs of all stakeholders in the real estate market.

Historically, rental values were based on area averages, this didn’t always reflect reality as different sub-communities and properties have different pricing. Take somewhere like the Marina – you have a mix of buildings with vastly different qualities, and an average doesn’t capture that.

With the AI-driven model, things are much more dynamic and accurate. It updates faster and takes into account a broader range of factors, such as filtered search and ensuring the rents being set are fair and in line with the actual property. This kind of transparency gives tenants and landlords more confidence and trust in the market.

What do landlords need to know about rental increases?

According to the decree, landlords must now follow these rules:

• If your rent is less than 10 percent below the average market rate, no rent increase is permitted.

• If your rent is between 11 percent and 20 percent below the average market rate, a maximum increase of five percent is permitted.

• If your rent is between 21 percent and 30 percent below the average market rate, a maximum increase of 10 percent is permitted.

• If your rent is between 31 percent and 40 percent below the average market rate, a maximum increase of 15 percent is permitted.

• If your rent is more than 40 percent below the average market rate, a maximum increase of 20 percent is permitted

Can the index make investing in the market easier?

For investors, this is great news as it will create a more reliable framework, with AI and advanced algorithms at its core, it would allow investors to access accurate rental yields and market trends, which will help guide their investment choices.

There’s also talk in the market about credit checks for tenants being introduced.. If that happens, landlords will have even more peace of mind knowing their tenants’ financial reliability before signing contracts. It’s a system used globally, and bringing it to Dubai would undoubtedly lead to more stability and fairness in rental prices, benefiting both tenants and landlords.

Each building will now be evaluated on an extensive set of criteria including its technical and structural characteristics, the quality of finishes and maintenance, the building’s location and the level of services available. The wide-ranging criteria is intended to provide a more precise calculation mechanism which will consider all possible factors that could influence the value of your rent.

It is giving tenants a powerful tool to negotiate fair rent increases with their landlords, ensuring that adjustments align with newly established guidelines.

The new index is accessible via the Dubai Land Department website for renters and landlords

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