The Dubai Land Department (DLD) has introduced the Smart Rent Index to regulate rent increases, stabilize rental prices, and counter overall inflation in Dubai in 2025. The index calculates allowable increases by analyzing data such as rental values in the building, average local rents, and building classifications. This move aims to enhance transparency in the real estate market, ensure fairness, and build confidence in Dubai's property sector.
A key feature of the Smart Rent Index is a clear mechanism that dictates how rent increases are managed. Landlords must notify tenants of any intended rent hikes at least 90 days before the contract expires, with adjustments only taking effect if the property meets the eligibility criteria specified in the Smart Rent Index. If landlords fail to provide the required notice within the timeframe, the increase will not be enforced, ultimately benefiting tenants.
The growing trust in Dubai's rental market is evident, with a notable 8% increase in registered lease contracts in 2024 compared to the previous year, reaching over 900,000. To adapt to market dynamics, the Dubai Land Department commits to regularly updating the Smart Rent Index, ensuring a balanced approach that caters to the needs of both landlords and tenants throughout the emirate.
The Smart Rent Index plays a crucial role in ensuring transparency and fairness in rental value determination. Majid Al Marri, the CEO of the Real Estate Registration Sector at Dubai Land Department, emphasized that this tool marks a significant milestone in Dubai's journey towards digital transformation and market equity. Al Marri highlighted that the Smart Rent Index combats inflation, aids stakeholders in making informed investment choices, and establishes clear, standardized criteria for determining rent adjustments based on current market realities.
By incorporating artificial intelligence, the index provides accurate rental price assessments across various residential areas, special zones, and free zones in Dubai. These assessments align rent increases with actual market values and trends, thereby contributing to a balanced cost of living in the city. In cases where conflicting indices arise due to contract renewal dates, specific rules determine whether the previous or new index should be applied. This framework further strengthens the market's integrity and stability.
