Dubai Land Department Announces the Update of the Rental Index for 2018

Dubai Land Department (DLD) has announced that the rental index has been updated for 2018. DLD confirmed that the new update is for all residential, commercial and industrial properties in the Emirate of Dubai.

DLD’s specialists have adopted a variety of mechanisms to carry out the upgrade process, including reading the average data of tenancy contracts registered in the ‘Ejari’ system and the real estate data and units registered in DLD’s databases.

The new rental index includes all areas of the Emirate, all types of property, and indexes for new projects. For the first time this year, a land rent index has been added for land with annually renewable lease contracts.

Mohammed Yahya, Deputy Executive Director of the Rental Affairs Sector at DLD, commented: “The rental index is based on a calculation of the increase in rental values, reflecting average rents in different areas, the rental value of registered leases, and the properties offered for leasing.  Updating the rental index once a year helps us to maintain transparency in rental transactions for the various properties available for leasing throughout the Emirate. This limits conflict between the parties involved, especially as it is a reference that everyone can rely on.”

In general, the rent index is updated once a year and made available at the end of September on DLD’s website: https://www.dubailand.gov.ae/Arabic/Pages/Rental-Increase-calculator.aspx. This allows owners three months to notify tenants of updated lease values for the coming year. The index is based on Decree No. 43 for the year 2013, which determines rental fee increases in the Emirate of Dubai.

The same decree set an increase of 10% of the rental value for the real estate unit if the rental fee is between 21% and 30% of the average wage, an increase of 15% if the rental fee is 31% to 40% less than the average wage, and an increase of 20% if the rental fee is less than 40% of the average wage.

As the rental index helps to achieve transparency and incorporates various factors in its calculations, it is accepted as a trusted reference point for all parties in the real estate sector. The correlation between the rental index and the lease classification is a positive factor; by clarifying the type of the lease between the landlord and the tenant, and accurately describing the property, the rental index reduces rental disputes.

The annual update of the index reflects DLD’s efforts to consolidate the real estate legislation set up by the Emirate to preserve and protect the integrity of the real estate sector.