The long-awaited updated RERA rental price index has been published, entitling tenants to up to a 50 percent discount on previously issued guidelines, Arabian Business can reveal.
The new index, which appears in the form a 'Rental Increase Calculator' on Dubai property watchdog RERA’s (Real Estate Regulatory Authority) website, allows tenants to negotiate significantly cheaper rents than the ones previously issued by the government body in January. Landlords use the index to set rents in Dubai.
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A three bedroom villa in The Springs should cost between AED140,000 and AED160,000 a year, a maximum of a 50 percent discount on the previous guideline rent of AED250,000 to AED280,000.
A two bedroom apartment in the Marina on old pricing levels was AED150,000 to AED180,000 a year. Tenants can now expect up to 36 percent fall in rent of AED120,000 to AED160,000.
There has been weeks of intense media speculation over the release date of the new index and whether it would be completely updated to reflect cheaper rents amid the downturn, or just be expanded to include areas left out of the original survey.
Published three months ago, the first index which replaced the rental cap, was criticised because it used prices at the top of the market.
Brokers and industry figures thought the guidelines for rents were too high and failed to accurately represent the rapidly cooling market, where rents and prices have plummeted in the wake of a severe property downturn.
According to RERA, a four bedroom villa on the Palm Jumeirah should now be leased for AED300,000 to AED350,000, compared with the previously recommended rent of AED400,000 to AED500,000 - a reduction of up to 40 percent.
Residents at The Greens should now pay AED120,000 to AED140,000 a year for a two bed apartment, a maximum of a 36 percent drop on RERA’s last recommendation.
In International City, the real estate watchdog has slashed the price of rents by 22 percent, from AED85,000 to AED90,000, to between AED70,000 and AED80,000.
It has cut rents by the same amount at Jumeirah Beach Residence (JBR) to between AED140,000 and AED160,000.
While no rental index table has been published, the new prices are calculated by inputting information into a specially set-up part of RERA's website.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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