Dubai Week

Here’s what’s happening with rents in Dubai next year

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Dubai Land Department (DLD) has updated its rental index for 2018 and here’s what you need to know.

The Real Estate Regulatory (Rera) rental index includes residential, commercial and industrial properties in all areas of the emirate and indexes for new projects. New for this year, properties with annually-renewable lease contracts have been added to the land rent index. Previously it only covered freehold locations.

(FYI, freehold means ownership of your share of the land and the building, leasehold building only.)

How is this worked out? 

The index is based on Decree No. 43 for 2013, issued by His Highness Sheikh Mohammed bin Rashid Al Maktoum, in his capacity as the Ruler of Dubai, Vice-President and Prime Minister of the UAE. This ruling determines rental fee increases in Dubai.

DLD specialists assess tenancy contracts registered in the ‘Ejari’ system and the real estate data and units registered in DLD’s databases.

Mohammed Yahya, Deputy Executive Director of the Rental Affairs Sector at DLD, explains: “The rental index is based on a calculation of the increase in rental values, reflecting average rents in different areas, the rental value of registered leases, and the properties offered for leasing.

“Updating the rental index once a year helps us to maintain transparency in rental transactions for the various properties available for leasing throughout the Emirate. This limits conflict between the parties involved, especially as it is a reference that everyone can rely on.”

Does this mean my rent is going to go down?

First, check out the Rental Increase Calculator. Legally, landlords cannot charge more than the Rera Rent Index will allow and if they do, tenants can raise a dispute with Rera.

If you’re already paying within the band set by Rera, then probably not. However it does offer a baseline for negotiation when renewing or looking for a new home.

However, if a tenant is paying less than the Index average, then rent could go up as below:

  • An increase of 10 per cent of the rental value if the current rent is between 21 and 30 per cent of the average for the area
  • 15 per cent if the rent is 31-40 per cent less than the average
  • 20 per cent if the rent is less than 40 per cent

Expect a busy increase calculator today while everyone works out what they should be paying or charging next year! Thinking of moving home? Read our hassle-free guide first!

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