Prices could determined by building quality not area
ubai rental structures could be seeing significant changes with a new Rental Index to govern how much landlords and building owners will be able to hike prices for tenants.
Proposed changes currently under discussion are for Dubai’s rental index to be based on the quality of individual buildings rather than the neighbourhood they are in, according to media reports. The mulled updates come as rents in Dubai have surged 27 percent this year.
Palm Jumeirah, Al Barari, JLT, Dubai Marina are areas with higher rents due to location however, these locations could now see a range of rental options based on building quality providing rents with varying budgets with more options.
The changes however seem to be only in the works for apartments, excluding villas, for now.
The significant change being considered is that the amount landlords can increase rent by will be governed by a building’s star rating and prices will be independent of the neighbourhood they are in.
Landlords will need to justify rent increases in each building and not just increase prices as neighbours are doing so.
The age, quality and facilities of the building will need to be taken into account.
According to media reports, the Dubai Rental Index could be updated as early as next year if approved by authorities.
Arabian Business reported earlier this month that the average price of renting property in Dubai went up by more than 27 percent amid a sharp increase in demand for Dubai real estate, according to information released by CBRE.
The number of new contracts has seen a decline and renewals are higher as renters are less willing to move amid the rocketing prices.
“Ejari data shows that the number of new contracts registered year-on-year in the year to date to October 2022 fell by 4.7 percent, whereas renewals have increased by 33.6 percent, indicating that tenants are less willing to move given current market conditions, not surprising given that the number of listings are down 6.7 percent month-on-month, said Taimur Khan, Head of Research – MENA, CBRE said.