Dubai has recently launched an innovative smart rental index, which promises to revolutionize the way tenants and landlords navigate rental costs. Introduced by the Dubai Land Department on January 2, this new Dubai Smart Rental Index is designed to provide fairer and more precise rental valuations for tenants, landlords, and investors throughout the emirate.

The smart rental index utilizes advanced artificial intelligence technology to establish a comprehensive classification system aimed at ensuring equitable property valuations. It encompasses all residential areas in Dubai, including key neighborhoods, special development zones, and free zones. This uniform approach guarantees that the same evaluation and pricing criteria are consistently applied across the entire emirate.

How does the Dubai Smart Rental Index impact my rent?

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Under this new system, each building will be assessed based on a detailed set of criteria. These include the technical and structural characteristics of the property, the quality of its finishes and maintenance, its location, and the range of services available. Additionally, the index will take into account prevailing market conditions to inform its calculations.

This development is particularly significant for tenants. If a landlord intends to raise rent, they must have made improvements that enhance the property’s value. In essence, rental increases can only occur if the property receives a higher rating within the index.

While any rent increases will still adhere to the guidelines set forth in Dubai Land Department Decree Number 43, the smart rental index aims to make this process more transparent and fair. According to the decree, landlords are required to follow these specific rules:

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

The comprehensive criteria are designed to facilitate a more accurate calculation mechanism, taking into account all potential factors that could influence rental values. As part of this initiative, the RERA calculator has been updated for the first time since March 2024. By entering your Ejari number, you can obtain a more precise rental range.

The new index is readily accessible on the Dubai Land Department’s website, catering to both renters and landlords. The introduction of the Dubai Smart Rental Index aligns seamlessly with Dubai’s ongoing Digital Strategy and the broader objectives outlined in the Dubai Real Estate Sector Strategy 2033.

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