Dubai to launch new smart rental index in January 2025

The index will foster 'trust, transparency, and confidence among landlords, tenants and investors'

Waheed Abbas

Published: Sun 29 Dec 2024, 11:21 AM

Last updated: Mon 30 Dec 2024, 10:35 AM

A new ‘Smart Rental Index’ will be launched in Dubai in January 2025, the Emirate’s real estate regulator has announced.

The new index will regulate and develop Dubai’s real estate sector, “particularly in rental valuation”.

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According to the Dubai Land Department, the index will foster “trust, transparency, and confidence among landlords, tenants, and investors”.

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The regulator said that the new index will provide accurate and up-to-date data for all stakeholders including investors, landlords and tenants.

The index is a benchmark for tenants, landlords and property brokerage companies in the emirate to assess and calculate new rents, as well as renewals across the emirate. These rates also play a critical role in the case of disputes between tenants and landlords.

The latest update in the rental index was announced in March when rates were hiked to bring them in line with the market rates.

Rents in Dubai have been on the rise over the past four years, driven by an inflow of new residents and investors into the emirate, whose population grew by more than 100,000 this year alone.

According to Cushman Wakefield and Core, city-wide rents increased by 18 per cent year-on-year in the third quarter of 2024, marking the 15th consecutive quarter of significant growth, as the city’s rental market continues to become more costly for tenants.

Villa rents have shown some stabilisation, with a 13 per cent year-on-year increase, while apartment rents have seen a sharper rise of 19 per cent over the same period.

Demand for new homes is outpacing supply in the emirate, resulting in a spike in rents across all the segments of the city.

In the third quarter of 2024, approximately 9,157 residential units were delivered across Dubai, bringing the 2024 number to 22,900 units including both apartments and villas.

The Dubai Land Department said the smart rental index is a “comprehensive system that combines cutting-edge technologies with accumulated real estate expertise, ensuring exceptional service that meets the needs of all stakeholders in the market.”

In August 2024, the Abu Dhabi Real Estate Centre (ADREC) – the regulator of Abu Dhabi's real estate sector – launched the first residential Rental Index for the capital. Serving both tenants and landlords, the platform was designed to increase transparency, provide indicative rental values and support the stability of the capital’s growing rental market.

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