When Dubai tenant Jasim Mohammed opened a rent increase notification email for his Al Quoz apartment, the proposed new rent was higher than expected. He has lived in the apartment for three years, watching his annual rent rise steadily from Dh48,000 to Dh56,700. His contract is due for renewal in March 2026 and his real estate office notified him of another increase, this time from Dh56,700 to Dh63,000.

Instead of arguing over ‘market rates’ or checking with his neighbours, Jasim did what an increasing number of Dubai tenants are now doing: He checked the Dubai Land Department’s Smart Rental Index. The result, he said, showed the building was not eligible for a rent increase, with the amount of increase marked “not applicable”.

So he wrote back to the real estate office with the index outcome. The response was immediate: The rent was retained at Dh56,700.

Since the Smart Rental Index was launched last year, rental negotiations are increasingly being carried out using official, building-specific data, according to real estate experts. The process has become more transparent, with tenants using it to negotiate better rents.

The updated index uses an advanced building classification approach that considers a property’s technical and structural characteristics, finishes and maintenance, location and spatial value, and services such as cleanliness and parking management. Rent increases are determined by the gap between a tenant’s current rent and the average market rent — starting at 0 per cent in some cases and reaching up to 20 per cent in others.

How the rental index works

Niral Jhaveri, director of Property Management, Better Homes, told Khaleej Times that tenants are actively using the index to ensure fair evaluations.

“In many leasehold buildings, there have been no significant increases, or rents have remained the same for certain unit types. The Rera calculator now allows users to select a specific building name and evaluate data for that property to determine any permissible increase. This provides a fairer evaluation process.”

Karamfila Jaknouz, head of Commercial, A1 Properties, explained that pricing is no longer driven by asking rents or assumptions, but by real, registered transactions, which leads to fairer negotiations.

“Tenants are definitely using the index more actively. We’ve seen landlords revise or pause increases once the index showed lower permissible adjustments, choosing stability over vacancy.”

She stressed that both landlords and tenants benefit from the index: Tenants gain clarity, while landlords gain efficiency, and the “market benefits from long-term stability”.

In one example she shared, the impact was tangible: “We’ve seen proposed renewals (for an apartment in Dubai Marina) drop from around Dh225,000 to Dh205,000 once the rental index was applied.”

She advised tenants to go into renewal discussions prepared. “Review the rental index, recent deals in your building, and approach negotiations with data rather than emotion.

“From an agent’s perspective, the index has made our role much more effective. We are now able to advise both landlords and tenants using clear, official data, which helps manage expectations on both sides.”

Why the rental index matters

Shabna Ibrahim, a property manager, said tenants are more aware of their rights now. “I have been seeing a lot of tenants getting rent increase notices and replying with screenshots of current rental index and hence no actual increase.”

As Khaleej Times reported, rents in Dubai are expected to continue rising in 2026 — by around four to six per cent in select areas — even as new supply comes online and competition between landlords increases.

However, industry experts say the Smart Rental Index is changing how those increases play out on the ground, particularly for existing tenants. While headline rental growth is likely to persist in high-demand communities, the use of official, building-level data is helping moderate increases during renewals and giving tenants greater clarity on what is and is not permissible.

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Source: Khaleej Times 

05th January, 2025