Dubai Authorities Revise Rent Calculator: What Does it Mean for You?

Dubai Authorities Revise Rent Calculator: What Does it Mean for You?

Attention all Dubai renters! The Real Estate Regulatory Authority (RERA) has updated the rental index as of March 1, 2024, which could significantly impact your rent if you've been living in a property for more than two years.

What are RERA rental indices?

RERA rental indices are a system developed by RERA that establishes the maximum percentage by which landlords can increase rent upon renewal of a tenancy contract.

The system is divided into several zones:

Zone 1: Palm Jumeirah, Jumeirah Beach Residence (JBR), Dubai Marina

Zone 2: Burj Khalifa Downtown, Business Bay, Sheikh Zayed Road

Zone 3: Deira, Bur Dubai, International City

Zone 4: Dubai Silicon Oasis, Jumeirah Village Circle (JVC), The Greens

Each zone has its own index. For example, in 2023, the rental index for Zone 1 is 5%, while for Zone 4 it is 2%.

How can the index update affect you?

If you have been living in Dubai for two years, your rent upon contract renewal can be increased according to the updated index, but not more than the set index for your zone. This could mean a significant increase in your expenses, as rent is expected to rise by 10-20% in some areas.

In the long term, this could lead to market stimulation and lower rents.

However, the short-term effect may be noticeable for many tenants.

What to do?

For tenants:

  • Find out which zone your property is in.
  • Check your tenancy contract and see which rental index applies to your area.
  • Calculate how much your rent might increase.
  • Be prepared to negotiate with your landlord about renewing your contract.
  • Compare prices for similar properties in your zone.
  • Be prepared for the possibility of having to relocate.

For landlords:

  • Follow RERA regulations when increasing rent.
  • Be prepared for some tenants not being able to afford the increased rent.

For investors:

When investing in Dubai real estate, consider the impact of RERA rental indices on the profitability of your investments.

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