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Dubai is thinking about redesigning its rent index so that it is tied to specific buildings, rather than trends in the area. Although it is still only a proposal, if adopted, it will increase the transparency of the bid-setting process. The lessor or owner of the building will also be responsible for ensuring that their rental requests are reasonable.
It is interesting to note that this updated design is applicable only to apartment buildings, not villas. It is unclear whether a new index for villas will be developed.
If approved, the changes will take place at a time when rents have increased by 15-25% in most areas of Dubai. Even greater growth than the national average was observed in places such as Palm Jumeirah, Downtown and Dubai Marina.
Be that as it may, this proposal ensures that landlords transparently determine rental requests, and represents the largest change in the rental index in Dubai. In the end, tenants will be allowed to decide for themselves how this happens.
The purpose of the changes in the rent index indicators is to prevent a situation where landlords of old buildings raise rates every time new buildings with higher rents appear in the neighborhood. Or in cases where landlords want to raise the rent just because the rent in the neighborhood has increased.
Landlords with buildings older than a certain age will be allowed to increase rent only in accordance with inflation or within certain limits in accordance with the proposed change. Those who own houses in later buildings and who have a 4-star rating have much more leeway in terms of when and how much they can improve.
