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Dubai Land Department updates rental index and calculator: What it means for tenants and landlords

The revamped RERA calculator now serves as the sole source for determining permissible rent hikes, promoting transparency and predictability for tenants in Dubai’s dynamic rental market

Dubai Land Department updates rental index and calculator: What it means for tenants and landlords

As Dubai’s rents continue to stay on the uptick, the Dubai Land Department has announced further updates in their rental index, rental calculator, and rent evaluation service.

The RERA calculator, which was updated on March 1st this year, is set to be the single source for calculating rental increases. In the past few years, landlords had the option to apply for a rental evaluation to adjust the current market benchmark set by the outdated calculator.

The updated calculator means landlords can no longer increase rental prices above the benchmark provided on the RERA calculator, allowing for greater transparency and reliable insights to tenants. While landlords still have the option to obtain re-evaluations, the process of obtaining a revaluation certificate has changed.

As of April 1st, in order to apply for the rent evaluation service, attaching a judgment or legal order is a requirement. 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.

Anisha Sagar, Director of Property Management at Allsopp & Allsopp Group, Dubai’s leading real estate company says, “Early figures show that as of Q1 this year, 72,885 rental contracts have been renewed, which equates 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”.

The number of rental contract renewals has shown a 7.2% year-on-year decrease, with Q1 2023 recording 78,565 rental renewals, perhaps an indication of the continued move of tenants looking to purchase homes in Dubai, as the rents have continued to rise over the last 12 months.

Understanding rent regulations

In Dubai, rental agreements typically last for 12 months and tenants can renew by giving 90 days’ notice. Landlords can increase rent with 90 days’ notice, but it must be within limits set by the Dubai Land Department.

Dubai’s rental market is overseen by the Real Estate Regulatory Authority (RERA), which ensures fair practices for both tenants and landlords.

Rent increases are not arbitrary; they must follow specific guidelines based on the current market rate for similar properties in your area.

Dubai rent calculator: How it works

This free online tool (https://dubailand.gov.ae/en/eservices/rental-index/rental-index/) helps you understand the permissible rent increase for your property.

What you’ll need:

Property Type: Specify if it’s an apartment, villa, staff accommodation, etc.

Area: Select the specific community or district where your property is located.

Current annual rent: Enter the total annual rent you currently pay.

According to the Land Department’s Decree Number 43, a landlord must follow the rules below:

  • If your rent is less than 10 per cent below the average market rate, no rent increase is permitted.
  • If your rent is between 11 per cent and 20 per cent below the average market rate, a maximum increase of five per cent is permitted.
  • If your rent is between 21 per cent and 30 per cent below the average market rate, a maximum increase of 10 per cent is permitted.
  • If your rent is between 31 per cent and 40 per cent below the average market rate, a maximum increase of 15 per cent is permitted.
  • If your rent is more than 40 per cent below the average market rate, a maximum increase of 20 per cent is permitted.

Top 10 rental communities in Dubai

LocalityAverage Rent (AED)
Downtown Dubai170,513
Dubai Marina131,328
Dubai Creek Harbour140,946
Dubai Hills Estate193,460
Business Bay103,675
DAMAC Hills116,833
Town Square97,485
Palm Jumeirah335,567
Jumeirah Golf Estates482,585
Jumeirah Village Circle482,585
Please note: The list of top 10 rental communities is provided by Allsopp & Allsopp Group and the average rent is sourced from the Dubai Land Department (DLD).