Starting January 2, 2025, Dubai will implement a new rental index, creating a more fair system for rental rates.
What has changed?
- The new index is updated in real time, whereas the previous index was rarely updated.
- The previous rental index was based on areas, but the new one takes building ratings into account.
Dubai’s Land Department (DLD) uses artificial intelligence to assign buildings ratings from 1 to 5, considering factors such as the building’s age, location, safety, quality, and the number of services and amenities provided.
Owners of buildings with lower ratings can upgrade their buildings to improve their ratings.
Now, landlords can set rental prices based on the building’s rating, and this rating will also affect the rental price when renewing existing rental contracts.
This means that tenants in older buildings with lower ratings won’t have to pay the same rent as those in newer, higher-quality buildings in the same area.
The new index is expected to reduce the number of disputes between tenants and landlords and promote an increase in rental agreements and investments.
The number of new rental agreements in Dubai increased by 8% in 2024 compared to 2023. Experts predict that the rental market will continue to grow steadily in 2025.
