Introduction
Residential real estate rental in Dubai will be governed by an open building classification system with the establishment of the Dubai Land Department’s Smart Rental Index 2025.
The index represents a comprehensive system integrating the latest technologies and real estate expertise. It aims to provide exceptional services that meet the needs of all real estate market stakeholders.
It also makes rental value determination more transparent and equitable, which aligns with the goals of Dubai’s Digital Strategy and Dubai Real Estate Sector Strategy 2033.
Key Features of the Smart Rental Index
The index uses a sophisticated building classification system considering a property’s technical and service-related features.
A wide range of factors are used to determine any building’s value, including:
- Technical and structural characteristics
- Quality of finishes and maintenance
- Strategic location
- Spatial value
- Services and facilities (such as maintenance, cleanliness, and parking management)
The system seeks to guarantee that rental values are determined fairly and accurately, considering each property’s benefits and qualities.
Official Statements and Statistics
The introduction of the “Smart Rental Index” represents a significant shift in the regulation and growth of the real estate industry in Dubai, according to Majid Al Marri, CEO of the Real Estate Registration Sector at the Dubai Land Department.
He emphasized that this project increases openness, fosters confidence, and offers stakeholders a sustainable and balanced environment.
He said: “This index relies on artificial intelligence technologies and a building classification system and provides fair and accurate rental valuations, strengthening Dubai’s position as a global investment destination.”
“In 2024, the total number of registered rental contracts exceeded 900,000, reflecting an 8% growth compared to the previous year. This increase reflects the growing confidence in the Dubai real estate market, enabling all parties in rental agreements to make well-informed, ultimately achieving the aspirations of all parties and enhancing the long-term sustainability of the market.”
Implementation and Methodology
The index is founded on a set of uniform and unambiguous criteria to guarantee transparency in the property assessment process. To ensure that the expectations of both landlords and tenants are satisfied, a precise calculation mechanism was created that considers all factors influencing rental value, including the state of the real estate market. Its flexibility distinguishes it because standards are updated frequently to keep up with market changes.
Khalid Al Shaibani, Director of the Rental Affairs Department at the Dubai Land Department, gave a thorough presentation on the new rental index. He emphasized the benefits of the innovative index and how it helps to expand the real estate industry and increase transparency, which helps to create a sustainable and balanced environment that benefits all pertinent parties.
Recent DLD Initiatives
Earlier, the Dubai Land Department launched a series of initiatives to enhance the sector’s efficiency and simplify procedures.
These include interactive property management contracts that let property owners and management firms register and change contracts directly via the smart app, doing away with the need for conventional processes, and interactive rental contracts that allow landlords and tenants to register, renew, and cancel contracts easily through the Dubai REST app.
Additionally, DLD introduced the “Model Tenant Classification” system, an innovative tool to classify tenants’ credit ratings and obtain credit reports through the Ejari system and the smart app for interested parties.
Rental Increase Guidelines
The Dubai Land Department uses a transparent mechanism for rental hikes through the index by Decree No. (34) of 2013, in keeping with its dedication to openness and equity.
The increase percentages are determined based on the difference between the current rental value and the average market rent.
Rental increases start at 0% for rents less than 10% below the average market rent and can reach up to 20% for rents that exceed the average by more than 40%.
By preserving the rights of both landlords and tenants and promoting market stability, this system seeks to strike a fair balance.
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Coverage and Benefits
The index covers all residential areas in Dubai, including key regions, special development zones, and free zones, ensuring the standardization of evaluation and pricing criteria across the emirate.
It provides landlords with a reliable tool to evaluate properties and determine rent increases transparently while offering tenants protection from unjustified increases, enhancing their confidence in the real estate market.
Future Development Plans
Dubai Land Department is committed to the ongoing development of the index, with plans to expand its coverage to include additional real estate sectors, such as commercial and industrial indexes, and to introduce new services aimed at enhancing the user experience and building trust in the market.
Future initiatives will include providing training programs, offering specialized customer service, and ensuring continuous technical support, in addition to establishing multiple communication channels to meet the diverse needs of beneficiaries.
