The Department of Land and Real Estate in Dubai confirmed that the introduction of the "Smart Rental Index" has contributed to stabilizing the overall inflationary process in Dubai by 2025. This index aids in the adjustment and organization of mechanisms for increasing rental payments, which has been positively indicated on living expenses in the city.
The subdivision reported that the index covers all residential areas in Dubai, including key areas, areas with special development, and free zones. It utilizes artificial intelligence to provide precise and uniform estimates of rental rates, enhancing transparency and ensuring fairness in the real estate market.
According to "Dubai Lands", new changes in rental costs depend on the index, which determines the increase to be applied based on data extracted from various factors, such as rental costs in the building, the average rental cost in the area, and also the classification of the building.
In light of this, a clear mechanism for working with the increases in rental payments has been developed based on the landlord's notification to the tenant and the date of signing the renewal contract. In this mechanism, it is reflected that if the landlord notifies the tenant of the increase in rental payments according to the index 90 days before the end of the contract term, the increase will be applied if the indicator confirms the legality of this increase.
In case the new indicator indicates the legality of the increase in rental payments, and the landlord did not inform the tenant within 90 days before the end of the contract, the increase will not be applied. If the landlord notified the tenant of the rent increase 90 days in advance, and the building had the right to increase during that period according to the old index, but the new index indicates its absence, the renewal will be considered based on the old index until the current year (2025), while the new index will be applied if the contract is renewed in the current year 2025.
Speaking about this, the acting director of the real estate registry at the Department of Land and Real Estate in Dubai, Majid Al-Mari, noted that the recent introduction of the smart rental index is an important step toward ensuring transparency in the setting of rental payments and confirmed Dubai's obligation to digital transformation and strengthening fairness in the real estate market.
This occurs in the context of increasing trust in the rental market in Dubai, especially as over 900,000 rental contracts were concluded in 2024, representing an 8% increase compared to 2023. "Dubai Lands" confirmed that within the framework of its obligation, it will follow market trends and will regularly update the smart rental index to reflect changes in the rental market to ensure fair balance between landlords and tenants in the Emirate of Dubai.
He added: "The index allows for a decrease in inflation and helps investors on the basis of reliable data to make investment decisions." Al-Mari continued: "The index establishes permanent criteria for identifying rental increases in conjunction with actual rental rates and based on market updates."
