Property rental index to start early next year

RENTAL GUIDE: A property index will be introduced in Dubai next year to give a guideline to landlords when setting rents. (Getty Images)

A property index that will recommend rents for different types of homes in areas across Dubai has moved a step closer.

The Real Estate Regulatory Authority (Rera) has completed the formula that will define rent structures and is preparing to launch the index at the beginning of next year.

"The index will stop landlords exaggerating and increasing rents," Mohammed Khalifa bin Hamad, director of Owners' Relationship Management Department in Rera, told Emirates Business on Tuesday.

"Rera has defined the average annual rents for studios, one, two and three-bedroom apartments and compound and single villas."

However the scheme will not be legally binding and is designed to act as an indicator for landlords that shows the fair rent rate for each unit in each building or compound.

Bin Hamad said the move would create transparency over rent rates for each area and would will help investors to prepare their strategies.

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READERS' COMMENTS

index - do you think lanlords will follow it?
Posted by BMahesh on Sunday 24 August 2008 at 13:31 UAE time

I think if this index is just to act as a guideline...then sorry to say it is a waste of time...guideline for whom? The landlord who does not even acknowledge something being introduced by the government and residents hoping it turns into a law. There is no logic behind the inflated price hike, the square meters and facilities do not increase according to the price so what are we paying for the luxury lifestyle of the landlord? Or is it because every land / building owner is hiking prices, all landlords jump on the bandwagon! With the rent cap at least you know that next year you have to chill out this much more from your home budget for the rent...pay scales do not increase in line with the inflation rate so from where are people going to pay the rent...of course this gives rise to effect of socio-economic growth crime and greed. Comment from another reader was very true...people from surrounding countries who have visited Dubai in the hope of earning a good living have been discouraged due to the rent hikes, increase in general of cost of living, becoz they are offered double in their own home countries due to their countries economic growth that their success even encourages people already settled here to go back to their home countries. Just check the statistics of how many people have sent their families back home due to the inflation. You have that many people doing bad publicity anyways becoz their lives have been affected due to rising costs.

More transparency needed
Posted by The Consultant, Dubai, UAE on Wednesday 20 August 2008 at 10:22 UAE time


Issuing an index of average rents is a waste of time. The average in any area will be brought down by people who have been a unit for several years and who have been protected by the rent cap (there are a few landlords who abide by the rules!).

If someone happens to be renting, say, a 3 bedroom townhouse for AED 95,000 because they have been in it for 3 years, this is of no relevance to me; as a new tenant I would have to pay the current rate which is more like AED 200k.

What Rera need to do is join together with the Land department and produce a transparent listing of property transactions (sales and rentals) that is detailed enough to be of use to individual buyers and renters, i.e. detailed location, type of property, size of BUA and plot and sale/rental price. This way people can see for themselves what the prices are and can counter agents and landlords who try to exaggerate the price.

What about Abu Dhabi?!
Posted by Noura, Abu Dhabi, UAE on Wednesday 20 August 2008 at 10:16 UAE time

While I too, appreciate RERA's efforts, I am finding it so hard to believe that:
a) it took the gov't this long to launch these 'guidelines'
b) that these aren't legally binding = landlords can basically still do whatever they're doing
c) such 'guidelines' aren't being adopted in the Emirate of Abu Dhabi

How much longer do we have to suffer high rent, high inflation and high CPI before the government does something really worthy of posting a press release on?

Rental Index: A waste of effort
Posted by Waqqas, Dubai, UAE on Wednesday 20 August 2008 at 10:15 UAE time


As already mentioned by others here, what is the benefit of having this index without any legal binding? It sounds just a cosmetic step to tell the outside world that we have a Rental Index in place here in Dubai, the uselessness of which they may realise only when they will have the face the reality practically .... i.e. if no one tells them about it in beginning.

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