Dubai’s residential rental market has witnessed a sustained increase over the past three years. While the pace has slowed down recently, rents are expected to climb further. This aligns with the overall market trend and is partly driven by a limited supply of new housing units.
The recent revisions to the RERA Rental Index have significantly impacted rent renewals. Previously, these renewals often presented tenants with a more attractive option compared to finding a new property. However, the updated index now allows landlords to raise rents closer to current market value, potentially closing the gap between renewal and market prices.
These changes might incentivize some tenants to relocate, particularly those whose contracts come up for renewal later in 2024 or in 2025. The influx of new housing units expected later this year could potentially mitigate overall rent increases. However, highly sought-after areas are likely to experience continued rent hikes.
The RERA Rental Calculator plays a crucial role in determining permissible rent increases. Landlords are legally obligated to adhere to these guidelines. The breakdown provided clarifies the allowable percentage increases based on the difference between the current rent and the calculated market value.
While market forces might push for immediate rent hikes, adhering to the Rental Calculator is paramount. Landlords are empowered to adjust rental prices within the stipulated framework. However, they must provide tenants with a 90-day notification via registered email before any increase takes effect.
Both tenants and landlords have become increasingly knowledgeable about the rental index and valuation processes. While revisions allow for higher rent adjustments, the overall impact may be less dramatic than some anticipate.
This revised information offers a professional and concise overview of the current situation in Dubai’s rental market, highlighting key considerations for both tenants and landlords.
Source: https://www.khaleejtimes.com/uae/updated-rera-index-in-dubai-when-will-tenants-face-higher-rents
