Landlords in Dubai, who are eligible to increase rents under the new smart rental index, must serve tenants with a 90-day notice period before the expiry of tenancy contracts, the Dubai land Department clarified.
The 90-day notice period rule for tenants remains unchanged, even if the property is eligible for a rent increase under the new index.
The Dubai Land Department said on Sunday that if a landlord gave the required 90-day notice and the previous index supported a rent increase, but the new index does not, the renewal date will be based on two factors. First, the previous index will be applied if the contract was renewed before 2025; second, the new index will be enforced if the contract is renewed during 2025.
In January 2025, DLD launched a new smart rental index which takes into account many new aspects including the classification of the buildings, old and new rentals of the building, and area, among others. This new index is aimed at bringing transparency to the market.
Majid Al Marri, CEO of the Real Estate Registration Sector at Dubai Land Department, said the index establishes clear and standardised criteria for determining rent increases, aligning them with actual rental values and market trends.
In 2024, Dubai recorded over 900,000 lease contracts, an increase of eight per cent year-on-year.
Reducing inflation
The new rental value calculates the applicable increase based on data drawn from multiple factors, including rental contract values in the building, the average rental values in the area, and the building classification.
The index utilises artificial intelligence to deliver accurate and standardised rental price assessments to cover all residential areas, including key districts, special development zones, and free zones. This enhances market transparency, ensures fairness, and strengthens confidence in Dubai’s real estate sector.
The regulator said that the new index will also mitigate the impact of inflation in Dubai. Following a consistent rise over the past four years, rents account for one of the largest shares of the inflation basket in Dubai. The index is aimed at bringing stability to rentals and maintaining them to a more realistic level.
According to Cushman & Wakefield Core, apartment rents in the emirate increased 16 per cent and 13 per cent for villas in 2024. Rents grew for the 16th consecutive quarter in the fourth quarter of 2024.
“The smart rent index helps curb inflation and enables stakeholders to make informed investment decisions based on reliable data,” said Al Marri.
Dubai Land Department added that it would regularly update the Index to ensure a fair and balanced approach for landlords and tenants.