The Smart Rent Index determines eligible rent increases based on data from various factors, including rental contract values within the building, average rental values in the area, and building classification.
A clear mechanism has been established for handling rent increases based on the timing of the landlord’s notice to the tenant and the date of contract renewal.
Dubai, UAE – February 16, 2025: The “Smart Rent Index” launched by the Dubai Land Department has contributed to curbing overall inflation in Dubai for 2025. The index regulates rental increase mechanisms, positively impacting the cost of living in the city. Covering all residential areas, including prime, special development, and free zones, the index uses artificial intelligence to provide accurate, standardized rental evaluations, enhancing transparency and fairness in the real estate market.
The new rental value adjustments are based on the Smart Rent Index, which calculates eligible increases from data such as rental contract values within the building, average rental rates in the area, and building classification. Additionally, a clear mechanism outlines how rent increases are applied based on the landlord’s notice timing and the renewal date of the lease agreement.
Mechanism for Rental Increase Eligibility and Application
According to this mechanism:
- If the landlord notifies the tenant of a rent increase based on the index at least 90 days before the contract’s expiration, the increase will be applied if the index confirms the property is eligible.
- If the index indicates an eligible increase but the landlord fails to notify the tenant 90 days prior, the increase will not be applied.
- In cases where the landlord notified the tenant 90 days prior and the old index indicated eligibility, but the new index shows the property is not eligible, the applicable index depends on the renewal date:
- If the lease was renewed before 2025, the old index applies.
- If the lease is renewed during 2025, the new index applies.
Ensuring Transparency and Promoting Market Fairness
Majid Al Marri, Executive Director of the Real Estate Registration Sector at the Dubai Land Department, highlighted that the launch of the Smart Rent Index marks a pivotal step toward ensuring transparency in rental assessments, reflecting Dubai’s commitment to digital transformation and market fairness. He stated:
“The Smart Rent Index plays a crucial role in curbing inflation and supports stakeholders in making investment decisions based on reliable data.”
Al Marri also emphasized that the index establishes consistent standards for determining rent increases based on actual market values. This comes as confidence in Dubai’s rental market grows, with over 900,000 rental contracts recorded in 2024, marking an 8% increase compared to 2023.
In line with its commitment to market evolution, the Dubai Land Department will continue updating the Smart Rent Index regularly to align with changes in the rental market, ensuring a fair balance between landlords and tenants in Dubai.
