Dubai Rent Index update better reflects city-wide rent increases

During rent increases, landlords wishing to increase more than the average for a particular location can apply to the authorities. “We understand that the Dubai Rent Dispute Settlement Center (RDSC) allows landlords to request rental valuations of their properties on a case-by-case basis,” said Manali Sangoi, partner at law firm Hadef & Partners.

“In (some) cases, we understand that the RDSC authorizes rent increases up to the assessment identified in the rent assessment certificate obtained by the landlord. This can go beyond the amount shown in the index, but provided that a 90-day notice of rent increase has been served by the landlord. We asked the RDSC to clarify this.

We understand that the Dubai Rent Dispute Settlement Center (RDSC) allows landlords to request rental valuations of their properties on a case-by-case basis.

– Manali Sangoi, Associate at Hadef & Partners.

This is why the Dubai Rental Index update is of such significance, as key locations have seen a 20% increase between last year and today. Some neighborhoods/popular neighborhoods have also seen a slowdown in the rate of increase, but for tenants who will only offer cold comfort because they would still have paid the increased rents during renewals or new contracts.

In Dubai, the rental market has already reached a point where landlords are taking the lead. “Citywide rents for villas (are) up 25% and apartments up 12% year-over-year (on average),” said David Abood, partner at Core , the real estate consulting firm. “Additionally, centrally located (residential) stock is experiencing higher occupancy levels.

This has led most historical tenants to stay in their current accommodation and use the RERA rent calculator to limit their rent increases.

– David Abood, Partner at Core

So far this year there has been a steady supply of newly completed buildings in Dubai with more waiting to join over the past four months. Many of these units are for the rental market, but some landlords are also placing units for short-stay/holiday rentals.

“This has effectively meant a further reduction in rental properties available for one-year leases, and adds upward pressure on rates,” one estate agent said. “The last quarter could see a new peak, and that’s based on the applications we’re getting, with a lot of new arrivals waiting to reside in Dubai.”

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