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Tue 24 Dec 2013 09:13 AM

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Dubai updating rental index to include a property's view

Dubai Land Department says official rent increase calculator will next year be updated to include more variables

Dubai updating rental index to include a property's view

Dubai’s official rent increase calculator will be updated next year to take into account more details such as a property’s view, building services and precise location within an area.

Presently, the Dubai Land Department sets whether a landlord can increase a property’s rent using only the average value of the area, which does not take into account other significant factors such as the age and quality of the building.

“It is true that Dubai Land Department is working on updating the rental increase calculator that will take into consideration more details like the location, services and view, and it is expected to be launched during 2014,” a spokesperson told Arabian Business.

Changes also have been made to the law governing by how much rents can rise.

Under a new decree issued on Saturday by Dubai ruler Sheikh Mohammad Bin Rashid Al Maktoum, rent rises can now kick in when a property hits 11 percent below market value for an area, rather than 21 percent, and allow for rent rises of up to 20 percent.

If a tenant’s rent is between 11 percent and 20 percent lower than the average rent for a similar property, a landlord can now increase the rent by 5 percent – the previous maximum.

The maximum increase can be 10 percent if the property falls 21 percent to 30 percent below market rates and 15 percent if the property is 31 percent to 40 percent under average rents.

Properties that are more than 40 percent below average rents could be subject to an increase of up to 20 percent.

It is unclear whether the current caveat on landlords that prevents any rent increase for two years after a tenancy contract is signed will still apply.

The move follows several reforms initiated by the government in a bid to better control Dubai’s real estate market.

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nice 5 years ago

As soon as you get into subjective factors like view or quality - and in this town they are very subjective, then you lose the essence of what the index is all about. The point of the index is that it looks at a cross section - which means that the average is the average. If you include more details and have smaller pools to look at, then you will find that the stats are less meaningful. Rents are rising. Tenants are unhappy. These reforms do nothing to calm the fears. Do they give landlord's comfort? Probably not - as most landlords ignore the rules anyway

turk 5 years ago

My landlord has already increased my rent by 20%. When I went to the Dubai Land Department eServices section using their rent calculator, message came " The rental index under updating.Please contact pmrs@rera.gov.ae". I promptly sent a message to them requesting for information like how much increase can my landlord increase my rent stating the location and the current rent and expiry date of the contract. Unfortunately, no reply has come from them till today and I had to sign the contract since the 1 month advance notice was already expired. I really admire the ruler's push for egovernment but it can only be successful if people manning the department share the same vision. I have a totally different experience with RTA which should be the model for all Dubai government departments when it comes to egovernment.

The Clarion 5 years ago

A family can't stay in one place for a long time where in children can grow up. This is a clear sign of unstability. When families are unstable in a society it eventually affects their entire life and their chilrens' emotional and mental growth. We are like modern day nomads shifting from one residence to another on a yearly basis seeking for apartments with rents we can afford.

One day the country will experience loosing many skilled expats who have significant contributions to the economy because of this.