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Dubai United Arab Emirates
Dubai landlords still have the option to request a higher rental amount from the Real Estate Regulatory Authority (RERA) instead of using the most recent Rental Index update.
But as of this month, there is a new procedure for requesting a re-evaluation.
Landlords must now attach a judgment or court order when applying for the rent evaluation service as of April 1, 2024, according to Anisha Sagar, director of property management at Allsopp & Allsopp Group.
“This effectively reverses the trend in the last couple of years where a landlord has been able to pay a fee to the Land Department for rental valuations.
In March 2024, RERA revised its Rental Index, enabling landlords to raise rents in proportion to the rise in rental rates.
The only tool available for figuring out rental increases is the RERA calculator. Landlords had the opportunity to request a rental evaluation a few years ago to modify the market benchmark that the out-of-date calculator had established.
With the updated calculator, landlords are no longer able to raise rental prices above the benchmark shown on the RERA calculator, giving tenants more trustworthy information and increased transparency.
Sagar said as of the first quarter of 2024, a total of 72,885 rental contracts have been renewed, which equated to 145,770 tenant and landlord decisions. “With that kind of volume, it makes sense for the Rera calculator to be used as the single source of truth. Adding this layer of legal requirements allows landlords and tenants alike to be sure that valuation changes are vetted fairly against the updated calculator,” she said.
With 78,565 rental renewals in Q12023, the number of rental contract renewals has decreased by 7.2% year over year. Given that rents have been rising for the past 12 months, this may be a sign that tenants are still looking to buy homes in Dubai.
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