Dubai Land Department (DLD) has clarified that the property owners remain obliged to serve notice upon tenants for any intended increase in rents with a 90 Days’ Notice, even for properties in which an increase may be due as per the new smart rental index. Otherwise, this rule stays unaffected, notwithstanding the introduction of the new system, which is meant to make the rental market in Dubai more transparent.
The 90-day notice period is mandatory whether the new index supports the increase or not. If the landlord has given the notice and the old index allowed for a rent increase while the new index does not support the hike, the renewal date will depend on the conditions of the following two criteria: If the contract is renewed before the year 2025, the previous index will be applicable; and if the contract is renewed after the year 2025, the new index will now be applied.
In January 2025, the DLD launched a smart rental index, which has been modernized according to several factors such as categories of buildings, prevailing rents for properties situated in the relevant area, and the age of the property, among others. This initiative aims to enhance market transparency and standardize rent increase procedures to reflect actual market conditions and trends.
Majid Al Marri, CEO of the Real Estate Registration Sector at DLD, said that the new index uses artificial intelligence for accurate and objective assessment of rental prices. It incorporates all residential precincts, including central districts and free zones, thereby ensuring fairness and enhancing confidence in the marketplace.
In 2024, Dubai registered more than 900,000 lease contracts, which is an increase of eight percent from the previous year. The new index also seeks to combat inflation, especially in the rental sector, with rising prices adding to the cost of living in the emirate. Rent in Dubai jumped in 2024, with apartment rents climbing by 16% and villa rents by 13%, according to Cushman & Wakefield Core.
As mentioned by the DLD, the new index will provide stabilization of rental prices, rendering them more realistic and cutting down inflation. Simultaneously, the DLD confirmed that it would regularly update the index in the future to keep a fair balance between the landlords and tenants, establishing a much more transparent and reliable rental market in Dubai.
