Dubai: Landlords in Dubai must provide a 90-day notice to tenants before implementing any rent increase, even if the new smart rental index qualifies the property for an increase, the Dubai Land Department (DLD) has clarified.
The rule remains unchanged, ensuring that tenants receive ample notice before any rent adjustment, regardless of market fluctuations or changes introduced by the new index system.
How the Smart Rental Index Affects Rent Increases
The DLD clarified that if a landlord had already served a 90-day notice and the previous rental index supported an increase, but the new index does not, the following guidelines will apply:
- For lease renewals before 2025 – The previous index will determine the rental adjustment.
- For lease renewals in 2025 and beyond – The new smart rental index will be used.
The smart rental index, launched in January 2025, considers multiple factors such as:
- Building classification
- Historical and current rental values
- Location and demand trends
The goal of the index is to enhance transparency and ensure rental values align with real market conditions.
Dubai’s Rental Market and Inflation Control Measures
In 2024, Dubai registered over 900,000 lease contracts, marking an 8% year-on-year increase.
To curb rental inflation, the new index calculates rent increases based on comprehensive market data, including:
- Contract values within the building
- Average rental rates in surrounding areas
- AI-driven price assessments across key districts and free zones
The index is designed to stabilize rental prices, preventing sharp spikes and mitigating inflation, as rents constitute one of the largest expenses in Dubai’s cost-of-living index.
Impact on the Rental Market
According to Cushman & Wakefield Core, Dubai’s rental prices continued their upward trend in 2024:
- Apartment rents increased by 16%
- Villa rents rose by 13%
This marked the 16th consecutive quarter of rent growth. However, the new smart index aims to moderate these increases, ensuring a more sustainable rental market.
Ensuring Fairness and Stability
Majid Al Marri, CEO of the Real Estate Registration Sector at DLD, stated that the index:
- Provides clear criteria for determining rent increases
- Aligns rental values with actual market trends
- Enables informed decision-making for investors and tenants
The DLD will regularly update the index to maintain fairness and balance in the landlord-tenant relationship.
With these regulations in place, Dubai aims to preserve investor confidence, protect tenants from unjustified increases, and enhance overall market stability.
