Dubai: Can rents be increased every year? Caps and calculations explained

The regulator has put caps in place to protect tenants 'in a market as active as we are in now'

Sahim Salim

Published: Thu 9 Feb 2023, 6:00 AM

Last updated: Fri 10 Feb 2023, 1:55 PM

With rent rise in Dubai registering historic highs in 2022, tenants are getting increase notifications of between 15 and 20 per cent this year.

Sarah Hewerdine, head of marketing at agency-owned real estate website Houza, said it can be a “painful time” for tenants to accept these rent increases. “However, they should know that the RERA (Real Estate Regulatory Agency) rent calculator is there to protect them, and there are always areas available where they can save money.”

She said the typical term for an Ejari contract is 12 months, with a landlord having the right to increase the rent each year, provided it is in line with the RERA calculator. The regulator has put caps in place to protect tenants “in a market as active as we are in now."

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According to information available on the Dubai Land Department website, here’s how it works:

— If the rent is 10 per cent less than the market value, there is no increase.

— If it is 11-20 per cent lower, the maximum increase may be up to 5 per cent.

— If it is 21-30 per cent lower, the maximum increase may be up to 10 per cent

— If it is 31-40 per cent lower, the maximum increase may be up to 15 per cent.

— If it is lower than 40 per cent or more, the maximum increase may be up to 20 per cent.

5 tips to save big

Khaleej Times has collated five pointers that tenants in Dubai can use to save on rents based on an interview with Houza’s Hewerdine:

— Move out of central areas: This can help save on rent, but would require some sacrifice on the location.

— Compromise: If you’re after a high-quality grade building with a great gym and pool, but not willing to pay the premium, then moving further out is your best bet. If you’re happy to compromise on the quality of the apartment but want to live in the heart of Dubai Marina, there are plenty of options available in some of the older buildings.

— Negotiation: Do your homework and due diligence on current market rents.

— Cheques and rental discounts: If you were previously paying in four cheques and have the ability to do one or two cheques, ask for a reduced rental increase and opt to pay in larger installments.

— Have a good relationship with the landlord: Ultimately, a landlord wants as little hassle from a tenant as possible, so if you can make their lives easier, then you’re already in a good position to negotiate.

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