How RERA’s New Rent Index is Shaping Dubai’s Property Dynamics
A recent change in the Real Estate Regulatory Authority (RERA) in Dubai has been the update of its rental index which has greatly affected Dubai property market. This new index seeks to capture and present a more current and realistic condition of the market as we see it in the longer run to the advantages of both landlords and tenants.
Key Changes and Impacts
- End of ‘Covid’ Prices: Since the outbreak of the COVID-19 pandemic, investors operating in the commercial real estate sector agreed on cutting down rents to appeal to potential clients. Nevertheless, once the market has recovered, the new RERA index is gradually substituting such low rates and increasing rents to the current market level. This change has caused a significant rise in the rental prices mainly for renewal purposes.
- Balancing Act for Landlords: This has also come as a challenge for landlords where maintaining rental charges at reasonable rates as well as occupancy levels is the main determinant. The update has allowed the landlords to understand which rent increases are allowable thus enabling them to form new price strategies.
- Increased Tenant Awareness: The new index also puts a lot of power in the hands of tenants as it provides clear information on rental value of the areas in Dubai. RERA Rental Index can be used by the tenants to determine whether or not the hikes in rent prices are reasonable, which in turn lends to a more efficient rental market.
- Eviction Notices and Market Adjustments: One of the changes in the index has affected the regulation of eviction notices that allows the tenant to delay eviction by requesting new eviction notices from different property owners. This has result rather some tensions but is believed will help to stabilize the market adapting tenant’s expectations to the market demands.
- Supply and Demand Dynamics: In this regard landlords in mid-terminal area have seen it fit to change their rents to market price using the new index. This adjustment is particularly important in popular locations such as JVC and DHE where rental rates are still lower than the current market average hence making the stock market to reduce.
The new RERA Rental Index for Dubai represents a big leap forward in the emirate’s property market, intended to bring a greater level of fairness and transparency to the relationship between landlords and tenants. Hence, by mimicking the market conditions of the current market in a better way, efficiency of rental prices is made and, in this way, both of the parties are assisted to make or arrive at rational decisions.