The Smart Rental Index was introduced by the Dubai Land Department (DLD) on Thursday, signaling a significant turning point in the development and regulation of Dubai’s real estate market.
This index is an example of a complete system that combines real estate knowledge with the newest technologies.
It uses a sophisticated building classification system that takes into account all of a property’s technical and service-related features.
Technical and structural features, the standard of finishing and upkeep, the building’s strategic location and spatial value, and the caliber of services and amenities offered are just a few of the many factors that go into evaluating each structure.
The system seeks to guarantee that rental values are determined fairly and accurately, taking into account the actual benefits and qualities of each property.
The introduction of the Smart Rental Index represents a significant shift in the regulation and growth of the real estate industry in Dubai, according to Majid Al Marri, CEO of the Real Estate Registration Sector at the Dubai Land Department, who made this point clear during a press conference.
He emphasized that the program increases openness, fosters confidence, and offers stakeholders a sustainable and balanced environment.
“This index provides fair and accurate rental valuations, strengthening Dubai’s position as a global investment destination,” he said, relying on artificial intelligence technology and a building classification system.
“Over 900,000 rental contracts were registered in 2024, representing an 8% increase over the previous year,” he continued. This rise is a reflection of the increasing trust in the Dubai real estate market, which allows all parties to rental agreements to make educated decisions, ultimately fulfilling everyone’s goals and bolstering the market’s long-term viability.
The Dubai Land Department previously started a number of projects to improve the industry’s productivity and streamline processes. These include interactive property management contracts that let property owners and management firms register and change contracts directly via the smart app, doing away with the need for conventional processes, and interactive rental contracts that let landlords and tenants register, renew, and cancel contracts easily through the Dubai REST app.
DLD also unveiled the Model Tenant Classification system, a cutting-edge instrument for categorizing tenants’ credit scores and providing credit reports to interested parties via the Ejari system and smart smartphone.
In keeping with its dedication to openness and equity, the Dubai Land Department uses Decree No. (34) of 2013 to implement a transparent system for rental hikes through the index. The gap between the present rental value and the average market rent is used to calculate the increase percentages. For rentals that are less than 10% below the average market rent, rental increases begin at 0%, and they can go up to 20% for rents that are more than 40% over the average. By preserving the rights of both landlords and tenants and promoting market stability, this system seeks to strike a fair balance. In order to ensure uniformity in evaluation and pricing standards throughout the emirate, the index encompasses all residential areas in Dubai, including key areas, special development zones, and free zones. Tenants are protected from arbitrary rent increases, which boosts their confidence in the real estate market, and landlords are given a trustworthy tool to assess properties and decide on rent increases in a transparent manner.
FAQ’S
How Dubai’s new Smart Rental Index works: All you need to know
On Thursday, the Dubai Land Department introduced the new “Smart Rental Index,” which now includes all residential areas within the emirate, covering districts, special development zones, and free zones. This updated rental index goes beyond previous versions by incorporating a star rating system, providing information on both old and new buildings, and offering average rent prices for specific areas and buildings. Powered by artificial intelligence (AI), the index evaluates various technical and service-related aspects of properties. Residential buildings in Dubai are rated on a scale from one to five stars, based on factors like amenities, quality, maintenance, and facility management.
How can one get access to it?
The rental index is available on the Dubai Land Department’s website for both landlords and tenants.
For what reason was the Smart Rental Index launched?
Its goal is to give investors, landlords, and tenants fair and accurate rental valuations so that all three parties have a better understanding of the situation.Its goal is to give investors, landlords, and tenants fair and accurate rental valuations so that all three parties have a better understanding of the situation.
Does the index also include commercial buildings?
No.
Will the introduction of the Smart Rental Index result in higher rents?
Yes, a higher rating for your building will result in greater rent.
What does it cover?
All residential areas in Dubai are included in the index, including free zones, special development zones, and important districts, guaranteeing uniform pricing and valuation standards.
Which building-related topics are included in the index?
The index relies on an advanced building classification system that considers all technical and service-related aspects of properties. Each building is evaluated 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.
What is the maximum increase in rent?
As per Decree No. (34) of 2013, rental hikes are implemented. The gap between the present rental value and the average market rent is used to calculate the increase percentages. For rentals that are less than 10% below the average market rent, rental increases begin at 0% and can go up to 20% for rates that are more than 40% over the average.
Can old building owners also increase rent?
The building will be rated higher as long as it is updated and renovated.
Is it possible to update the new index frequently?
Indeed. In contrast to the previous index, which was updated quarterly, semi-annually, or annually, DLD claims that the current index may be updated daily to reflect the most recent statistics and rental patterns in Dubai.
Will foreign investment increase as a result of the Smart Rental Index?
Indeed. Local and international investors will find it easier to start projects and buy real estate if rental revenue is more transparent and clear.
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