Dubai’s Real Estate Regulatory Authority (RERA) has announced that it has implemented its updated guidelines.
According to RERA, landlords can now increase rents during tenancy renewals, with mass rent adjustments taking place across the Emirate following the recent update to the rental index.
However, industry experts suggest that many tenants won’t face higher rents until later this year or early next year, aligning with the end of their current tenancy contracts.
In March, RERA updated its index, potentially resulting in up to a 20% hike in rental values for tenants residing in properties for over two years.
The recalibrated RERA calculator, now reflecting open-market pricing, considers factors like location, property type, current rent, and room count to determine if a rent increase is warranted.
While Dubai’s rents surged 19% year-on-year in 2023, according to Cushman & Wakefield, the pace has slowed compared to the previous year’s 27% increase.
With many tenancy contracts due for renewal towards the end of 2024 or early 2025, tenants can expect the impact of the updated RERA Rental Index to materialise later this year or early next year.
Rental rates have been on an upward trajectory for the past three years, albeit with a recent slowdown, as reflected in the first quarter of 2024.
Despite market dynamics urging immediate rent adjustments, landlords must adhere to the Rental Calculator, which imposes limits on increases based on the discrepancy between current rent and calculated market value.
