Smart Rent Index Reduces Inflation in Dubai, Boosts Market Transparency

Post by: Bandan Preet

Photo: Dubai Government Media Office

The Dubai Land Department (DLD) has introduced a new system called the Smart Rent Index to help stabilize rent prices and reduce inflation in Dubai in 2025. This system uses data and technology to regulate how much rent can increase in the city. It helps make the rental market more transparent, fair, and trustworthy for everyone involved.

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The Smart Rent Index determines if a rent increase is allowed by looking at several factors. These include rental contract values within a building, the average rent prices in the area, and the type or class of the building. By using these data points, the system helps make rent increases more predictable and reasonable for tenants and landlords.

The Smart Rent Index also creates a clear system for managing rent increases. For example, landlords must notify tenants about rent increases at least 90 days before the contract expires. The rent increase can only be applied if the Smart Rent Index confirms that the property qualifies for an increase.

If a landlord does not notify the tenant on time (at least 90 days before the contract ends), the rent increase will not be applied, even if the Smart Rent Index says the property qualifies. If a landlord did notify the tenant on time but the new Smart Rent Index does not support the increase, the rules depend on when the lease was renewed:

• If the contract was renewed before 2025, the previous index applies.
• If the contract is renewed during 2025, the new index will apply.

Dubai Land Department’s goal with this index is to keep the cost of living stable by limiting sudden rent hikes. Majid Al Marri, the CEO of the Real Estate Registration Sector at DLD, said the Smart Rent Index is an important tool to ensure fair and transparent rent pricing. He also mentioned that the index supports Dubai's move towards digital progress and makes it easier for people to make smart decisions about real estate investments.

Al-Marri highlighted that the index uses clear and reliable rules to decide rent increases. These rules are based on actual market trends and rental values. This is especially important because the rental market in Dubai is growing, with over 900,000 lease contracts registered in 2024, which is an 8% increase compared to the year before.

The Smart Rent Index will continue to be updated regularly to keep up with changes in the rental market. This ensures that the system remains fair to both landlords and tenants across Dubai, helping to maintain a balanced and healthy rental market.

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