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How Dubai’s new Smart Rental Index works: All you need to know

Dubai’s real estate sector has taken another significant step towards transparency and efficiency with the launch of the ‘Smart Rental Index’ by the Dubai Land Department (DLD). This innovative tool is designed to provide accurate and fair rental valuations for tenants, landlords, and investors across the emirate

What is the Smart Rental Index?

The Smart Rental Index is a dynamic system covering all residential areas in Dubai, including key districts, special development zones, and free zones. It offers a standardized approach to rental valuation, ensuring clarity and fairness in pricing.

Key Features of the Smart Rental Index

  1. Star Rating System: Residential buildings are rated from one to five stars based on factors such as amenities, maintenance, and facility management.
  2. Comprehensive Data: The index includes details about both old and new buildings, average rents in specific areas, and building-specific rental insights.
  3. AI Integration: Powered by artificial intelligence, the system evaluates technical and service-related aspects, offering accurate rental assessments.

This thorough evaluation ensures a transparent reflection of each building’s quality and advantages.

How can people access it?

Tenants and landlords can access the rental index through the Dubai Land Department’s website.

What is the purpose behind the launch of Smart Rental Index?

It is aimed at providing fair and accurate rental valuations to tenants, landlords and investors to give a clearer picture to three parties.

What does it cover?

The index covers all residential areas in Dubai, including key districts, special development zones, and free zones, ensuring standardised valuation and pricing criteria.

What aspects of buildings are covered in the index?

The index relies on an advanced building classification system that considers all technical and service-related aspects of properties. Each building is evaluated based on a comprehensive set of criteria, including technical and structural characteristics, the quality of finishes and maintenance, the building’s strategic location and its spatial value, as well as the level of services and facilities available, such as maintenance, cleanliness, and parking management. This mechanism aims to ensure accurate and fair determination of rental values, reflecting each property’s true quality and advantages.

Does index cover commercial buildings as well?

No.

Will rents go up with the launch of Smart Rental Index?

Yes, rent will go up if your building has a higher rating.

How much can rent hike be?

Rental increases are applied in accordance with Decree No. (34) of 2013. The increase percentages are determined based on the difference between the current rental value and the average market rent. Rental increases start at zero per cent for rents that are less than 10 per cent below the average market rent and can reach up to 20 per cent for rents that exceed the average by more than 40 per cent.

Can old building owners also increase rent?

Provided they upgrade and renovate the building, resulting in a higher rating of the building.

Can the new index be updated regularly?

Yes. According to DLD, the index can be updated daily to reflect the latest data and rental trends in Dubai, unlike the previous index, which was updated on a quarterly, semi-annually or annual basis.

Will the Smart Rental Index attract more foreign investment?

Yes. More transparency and clarity in rental income will help local and foreign investors launch their projects and property purchases.