Rents in Dubai to depend on the condition of buildings and not the area

Dubai Land Department launches the Smart Rental Index 2025, marking a transformative milestone in regulating and developing Dubai’s real estate sector. This index represents a comprehensive system that integrates the latest technologies and real estate expertise, aiming to provide exceptional services that meet the needs of all stakeholders in the real estate market. It further enhances transparency and fairness in determining rental values, aligning with Dubai’s Digital Strategy and the Dubai Real Estate Sector Strategy 2033 objectives.

This was announced during a press conference held at the department’s headquarters, which was attended by several strategic partners, along with a group of representatives from government entities and real estate companies in Dubai, as well as DLD’s CEOs and Directors.

An Advanced Building Classification System

The index relies on an advanced building classification system that considers all technical and service-related aspects of properties. Each building is valuated based on a comprehensive set of criteria, including technical and structural characteristics, the quality of finishes and maintenance, the building’s strategic location and its spatial value, as well as the level of services and facilities available, such as maintenance, cleanliness, and parking management. This mechanism aims to ensure accurate and fair determination of rental values, reflecting each property’s true quality and advantages.

During the conference, Majid Al Marri, CEO of the Real Estate Registration Sector at Dubai Land Department, emphasised that the launch of the ‘Smart Rental Index’ marks a pivotal transformation in the regulation and development of the real estate sector in Dubai. He highlighted that this initiative enhances transparency, builds trust, and provides stakeholders with a balanced and sustainable environment. He stated: “This index relies on artificial intelligence technologies and a building classification system and provides fair and accurate rental valuations, strengthening Dubai’s position as a global investment destination.”

He added: “In 2024, the total number of registered rental contracts exceeded 900,000, reflecting an 8% growth compared to the previous year. This increase reflects the growing confidence in the Dubai real estate market, enabling all parties in rental agreements to make well-informed, ultimately achieving the aspirations of all parties and enhancing the long-term sustainability of the market.”

The index is based on unified and clear criteria to ensure transparency in the property valuation process. A precise calculation mechanism was developed that considers all factors influencing rental value, including the real estate market condition; it is characterised by its flexibility due to the continuous updating of standards to keep pace with market changes, ensuring that the expectations of both landlords and tenants are met.

The press conference also featured a detailed presentation on the new rental index, delivered by Khalid Al Shaibani, Director of the Rental Affairs Department at Dubai Land Department. Al Shaibani highlighted the advantages of the innovative index and its role in enhancing transparency and developing the real estate sector, contributing to creating a balanced and sustainable environment that serves all relevant stakeholders. 

A package of initiatives to enhance the efficiency of the real estate sector

Earlier, Dubai Land Department launched a series of initiatives to enhance the sector’s efficiency and simplify procedures. These include interactive rental contracts that allow landlords and tenants to register, renew, and cancel contracts seamlessly through the Dubai REST app, as well as interactive property management contracts that enable property owners and management companies to register and modify contracts directly via the smart app, eliminating the need for traditional procedures. Additionally, DLD introduced the ‘Model Tenant Classification’ system, an innovative tool to classify tenants’ credit ratings and obtain credit reports through the Ejari system and the smart app for interested parties.

Transparency and Fairness in Determining Rent Increase Percentages

In line with its commitment to transparency and fairness, Dubai Land Department applies a clear system for rental increases through the index, in accordance with Decree No. (34) of 2013. The increase percentages are determined based on the difference between the current rental value and the average market rent. Rental increases start at 0% for rents that are less than 10% below the average market rent and can reach up to 20% for rents that exceed the average by more than 40%. This system aims to ensure a fair balance, protecting the rights of both landlords and tenants while contributing to the market’s stability.

The index covers all residential areas in Dubai, including key areas, special development zones, and free zones, ensuring the standardisation of evaluation and pricing criteria across the emirate. It provides landlords with a reliable tool to valuate properties and determine rent increases transparently while offering tenants protection from unjustified increases, thereby enhancing their confidence in the real estate market.

Continuous Development of the Index

Dubai Land Department is committed to the ongoing development of the index, with plans to expand its coverage to include additional real estate sectors, such as commercial and industrial indexes, and to introduce new services aimed at enhancing the user experience and building trust in the market. Future initiatives will include providing training programmes, offering specialised customer service, and ensuring continuous technical support, in addition to establishing multiple communication channels to meet the diverse needs of beneficiaries. 

DLD encourages all interested parties to engage with its official channels for further information about the index, where a specialised team is available to provide assistance and respond to any related inquiries.