Dubai’s real estate authority has declared that a new “Smart Rental Index” will be introduced in January 2025.
The new index will develop and regulate Dubai’s real estate industry, “particularly in rental valuation.”
According to the Dubai Land Department, the index will foster “trust, transparency, and confidence among landlords, tenants, and investors”.
According to the authority, the new index will give investors, landlords, and tenants access to accurate and current data.
Tenants, landlords, and real estate brokerage firms use the index as a standard by which to evaluate and determine new rentals and renewals throughout the emirate. If renters and landlords disagree, these rates are also quite important.
Rates were raised to match market rates in March, marking the most recent change to the rental index.
Due to the influx of new investors and residents into the emirate—whose population increased by over 100,000 this year alone—rents in Dubai have been rising over the last four years.
As the city’s rental market continues to get more expensive for tenants, Cushman Wakefield and Core report that city-wide rents rose 18% year-over-year in the third quarter of 2024, marking the 15th consecutive quarter of notable gain.
While apartment rates have increased by more than 19% over the same period, villa rents have stabilized somewhat, rising 13 percent yearly.
The emirate’s demand for new residences is exceeding its supply, driving up rents in every area of the city.
About 9,157 residential units were supplied throughout Dubai in the third quarter of 2024, bringing the total number of units delivered in 2024—including apartments and villas—to 22,900.
The Dubai Land Department said the smart rental index is a “comprehensive system that combines cutting-edge technologies with accumulated real estate expertise, ensuring exceptional service that meets the needs of all stakeholders in the market.”
The Abu Dhabi Real Estate Centre (ADREC), which oversees the real estate industry in Abu Dhabi, introduced the first residential rental index for the capital in August 2024. The platform, which serves both landlords and tenants, was created to promote stability in the capital’s expanding rental market, boost transparency, and offer indicative rental pricing.
