Dubai Rental Index Updated To Better Reflect City-Wide Rent Increases – 5 Things To Know
With the updated Dubai Rental Index, landlords and tenants will have a better understanding of the entire leasing process in Dubai as there have been significant increases in residential rents in the city in recent months. Both landlords and tenants benefit from this because existing leases are getting renewed.
Here’s everything you need to know about the effect of the updated Dubai rental index, how will landlords be raising rents to post this, the determination of average rental value, the benefit of the updated rental index in Dubai, supply help, and what Dubai real estate agents have to say about this scenario.
1. What Is The Effect Of The Updated Dubai Rental Index On Landlords?
The landlord has more flexibility on what they can demand on leases featuring new tenants, however. In this case, tenants can expect landlords to ask for 20-30 percent more than what they have been paying since landlords are chasing fast-evaporating options to benefit from sustained demand. Several estate agents predict occupancy levels after summer will fall well below 10% in some of the most desirable residential locations in Dubai.
2. How Can Landlords Raise Rents?
Those landlords who wish to raise rents above the average for their location may file a request with the authorities. A few cases have been reported where landlords have applied for rental valuations of their properties in Dubai through the Dubai Rent Dispute Settlement Centre (RDSC).
According to expert real estate agents in Dubai understanding, the RDSC allows rents to be raised to the value outlined in the landlord’s rent valuation certificate. This may exceed the index amount, but only if the landlord gives 90 days’ notice of the increase. It has been asked for clarification by the RDSC.
3. How will average rental value be determined?
Based on the Rent Index in Dubai and approved by RERA (Real Estate Regulatory Agency), the average rental value of similar units will be determined. Both the Dubai Land Department’s website and the Dubai REST app offer the same information.
4. How is more supply going to help?
Tenancy agreements in Dubai must be amended or varied by either party at least 90 days before the expiration date of the contract if either party wishes to do so.
The construction of new buildings in Dubai has been steady throughout the year. More are expected to be completed in the final months. The majority of these units are intended for rental markets – but some landlords are also offering short-term or holiday leases in Dubai.
5. What do expert real estate agents have to say about this move?
“As we understand it, Dubai Rent Dispute Settlement Centre (RDSC) accommodates landlord requests for rental valuations in Dubai on a case-by-case basis,” says Nishchay Mehra, Director at Houzon, Dubai.
Currently, Dubai’s rental market is dominated by landlords. According to Vansh Mehra, Managing Director of Houzon, one of the region’s top real estate agencies, city-wide villa rents in Dubai have increased by 25 percent and apartment rents in Dubai have increased by 12 percent. Additionally, apartments in central locations of Dubai are more occupied. “The RERA rental calculator has allowed most incumbent tenants to limit their rental increases and stay in their current homes,” he adds.
There is a further reduction in the number of rental properties available on one-year leases, which will push rates higher,” said a real estate agent at Houzon. Based on the inquiries we have been receiving, many of which are from first-timers looking to settle in Dubai, we could see a further spike this quarter, he added.
The Takeaway:
Since key properties in Dubai have seen increases of 20 percent since last year, it is of great significance that the Dubai Rental Index is updated. Rents have also slowed in some popular districts and neighborhoods in Dubai, but for tenants, that is only cold comfort, as they will still have to pay the hikes on renewals and new leases in Dubai.