Dubai Launches Smart Rental Index to Regulate Rent Increases

This new tool evaluates buildings based on detailed criteria, including structural and technical features, maintenance quality, location, and available services. It also factors in current market conditions to create a balanced and data-driven rental valuation system.

One key feature of the Smart Rental Index is its potential to limit arbitrary rent increases. Landlords can only raise rents if improvements have significantly enhanced the value of the property, as reflected in the index. This ensures that tenants pay a fair price for their accommodations.

The index will be applied uniformly across all residential areas in Dubai, including free zones and special development zones, providing a cohesive and transparent system for rental calculations.

Under existing Dubai Land Department guidelines, rent increases follow specific thresholds. For example, if the rent is less than 10% below the market rate, no increase is permitted. Larger discrepancies allow for incremental increases, capped at 20% if the rent is over 40% below the market average.

By using AI to deliver fair valuations and regulate rent hikes, the Smart Rental Index is set to benefit both tenants and landlords, fostering greater trust in Dubai’s real estate market.