New Rental Index in Dubai & Ratings


New Rental Index in Dubai & Ratings

Dubai’s new rental index will be based on buildings rather than trends in the communities and neighbourhoods.

The new building index will be based on star ratings of each building, its quality and the amenities it provides to the tenants.

Rental Index

New rental index will be based on the star rating of each building. The authorities in Dubai have completed ratings of all residential buildings. The index will cover residential buildings only initially and villas would be considered at a later stage.

In the year to September 2022, average Dubai rental rates recorded their highest growth rate on record, with average rents in Dubai increasing by 26.6 %, according to real estate consultancy CBRE.

Average apartment and villa rents increased by 26.7 % and 25.5 %. However, rents in high-end areas such as Palm Jumeirah have increased at a faster pace due to strong demand and an influx of high-net-worth individuals in the emirate.

The rating system programme was launched in 2015 and covers all the old and new buildings in the emirate.

“The new rating mechanism is planned to be rolled out next year, following the approvals by the higher authorities,” said the source.

Under the new index, four-star buildings have been categorised as “free” which means there will be no restriction on these buildings in terms of rent crease as they are classified ultra-luxury segment. While others category buildings will be allowed to increase rents as per the policies that would be approved by the authorities.