The Dubai Land Department recently launched a smart rental index designed to bring more transparency and fairness to the emirate’s rental market.
The index, unveiled last week, covers all residential areas in Dubai, including key districts, special development zones, and free zones.
Real estate executives suggest that the introduction of the smart rental index could lead to varied impacts on rental prices. Older buildings with fewer modern amenities may experience a drop in rents, as landlords will be required to renovate and upgrade their properties before increasing rents. In contrast, newer buildings with high-end facilities could see rent hikes of up to 15%, as landlords align rates with current market trends.
According to Alec Smith, head of sales and leasing at Savills Middle East, the new system will help create a more straightforward approach to rent adjustments, making it easier for landlords and tenants to determine fair rates. He explained that the smart system addresses historical issues where rent hikes were sometimes deemed unjustified or excessive.
Lewis Allsopp, chairman of Allsopp and Allsopp, noted that the smart rental index is more focused on ensuring fairness and transparency than on driving up rental prices. He predicts that areas with older buildings, like Dubai Marina, may see rents level off or even decrease due to outdated amenities. Conversely, new high-specification buildings could see an increase in rents reflecting their true market value.
Overall, the smart rental index aims to create a fairer rental market by aligning rental values with the quality, condition, and location of properties. This move is expected to benefit owners of newer, premium properties while providing tenants with a clearer understanding of rental pricing.
News Source: Khaleej Times
