Dubai: New rental index to include building quality, amenities

Dubai’s new rental index will be based on buildings rather than trends in the communities and neighbourhoods.

Industry sources said the new building index will be based on star ratings of each building, its quality and the amenities it provides to the tenants.

“New rental index will be based on the star rating of each building. The authorities in Dubai have completed ratings of all residential buildings. The index will cover residential buildings only initially and villas would be considered at a later stage,” a source said.

In the year to September 2022, average Dubai rental rates recorded their highest growth rate on record, with average rents in Dubai increasing by 26.6 per cent according to real estate consultancy CBRE. Over this period, average apartment and villa rents increased by 26.7 per cent and 25.5 per cent, respectively. However, rents in high-end areas such as Palm Jumeirah have increased at a faster pace due to strong demand and an influx of high-net-worth individuals in the emirate.

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“Four-star is a free market because there are fewer number buildings and categorized into the luxury segment,” he said.