Rental Increases in Dubai – What Tenants Need to Know

Rental Increases in Dubai – What Tenants Need to Know

Source: Khaleej Times

Dubai’s Real Estate Regulatory Authority (RERA) has updated its rental index, enabling landlords to raise rents to align with current market values. This move has prompted many property owners to increase rents upon renewal of tenancy agreements. However, tenants with contracts expiring later this year or early next year may not feel the immediate impact, as RERA guidelines stipulate that rent increases can only occur at the time of contract renewal. While this offers temporary relief, tenants should be prepared for potential rent hikes when their leases are renewed.

Updated Index and Expected Impact

In March, RERA revised its index, which could result in rent increases of up to 20% for some tenants in the emirate. This adjustment primarily affects tenants who have resided in the same property for over two years.

"The Dubai property market has seen steady rent increases over the past few years. However, RERA's regulations have limited how much landlords can raise rents for renewing tenants," industry experts explain. "In some cases, this has created a significant gap between market rates and rents paid by long-term tenants."

The updated index allows landlords greater flexibility in raising rents, with many now permitted to increase rates by a higher percentage than before. This change is expected to bring rents closer to market value, impacting numerous tenants renewing their leases.

Bridging the Gap

For many landlords, this update addresses years of limited or no rent adjustments. It narrows the disparity between market prices and long-standing tenancy rates, offering a fairer return on investment. However, for tenants, especially those renewing after years of stable rates, this could lead to notable increases in housing costs.

What Tenants Should Do

• Stay Informed: Understand your rights under RERA guidelines and check the updated rental index to assess potential increases.
• Plan Ahead: If your lease is due for renewal, budget for a possible rent hike.
• Negotiate: Open communication with your landlord could help mitigate drastic increases, especially if you’ve been a reliable tenant.

The revised rental index reflects Dubai’s dynamic real estate market and the emirate’s efforts to balance landlord and tenant interests. For tenants and investors alike, understanding these changes is crucial in navigating Dubai’s competitive property landscape.

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