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Introduction of a Building Rating System:
Dubai’s new rental index introduces a rating system (1 to 5 stars) for residential buildings, based on over 60 criteria, such as location, sustainability, age, and amenities. -
Encouragement for Property Upgrades:
Landlords may need to renovate or enhance properties to justify rent increases under the new system. -
Focus on Individual Buildings:
Unlike the old index, which was zone-based and updated yearly, the new index uses AI to evaluate individual buildings and can be updated anytime. -
Expanded Coverage:
The system applies to all areas in Dubai, including freehold and non-freehold zones. -
Reduced Disputes:
By providing more accurate and transparent valuations, the index aims to minimise disputes between tenants and landlords. -
Future Expansion Plans:
Currently limited to residential properties, Dubai Land Department (DLD) plans to extend the rating system to commercial, retail, and industrial buildings in the future. -
Comparison to Previous Index:
The former system offered approximate values based on area-wide averages from the past one or two years, last updated in March. The new system represents a more dynamic and precise approach
Dubai Land Department (DLD) has unveiled the Smart Rental Index 2025, marking a significant advancement in regulating and developing the emirate’s real estate sector.
Announced during a press conference at the department’s headquarters, the index represents a comprehensive system integrating advanced technologies and real estate expertise. Its primary goal is to enhance transparency and fairness in rental valuations, in line with Dubai’s Digital Strategy and the objectives of the Dubai Real Estate Sector Strategy 2033.
Advanced Building Classification System
The Smart Rental Index leverages an innovative building classification system that evaluates properties based on multiple factors.
These include technical and structural attributes, quality of finishes and maintenance, strategic location, spatial value, and available services such as cleanliness, parking, and maintenance. This holistic approach ensures fair and accurate rental valuations, reflecting the unique advantages of each property.
Record Growth in Rental Contracts
Majid Al Marri, CEO of the Real Estate Registration Sector at DLD, described the launch as a pivotal transformation. “The index uses artificial intelligence and advanced classification systems to provide balanced and transparent rental valuations, reinforcing Dubai’s position as a global investment hub,” he said.
He also noted a record 900,000 registered rental contracts in 2024, reflecting an 8% growth compared to 2023.
Streamlined Processes Through Smart Initiatives
The launch aligns with a series of initiatives by DLD to enhance the sector’s efficiency. These include interactive rental and property management contracts available via the Dubai REST app, streamlining processes for landlords and tenants.
Additionally, the Model Tenant Classification System offers credit ratings and reports through the Ejari system, further fostering transparency and trust.
Fair Rent Increase Mechanisms
The index incorporates a clear system for determining rental increases, adhering to Decree No. (34) of 2013. Increment percentages are based on the difference between current rental values and market averages, ranging from 0% for rents less than 10% below average to 20% for rents exceeding the average by more than 40%.
This mechanism ensures a fair balance, protecting the rights of both landlords and tenants while maintaining market stability.
Comprehensive Coverage Across Dubai
The Smart Rental Index covers all residential areas, including free zones and special development zones, standardising evaluation and pricing across Dubai. This ensures reliable property valuations for landlords while protecting tenants from unjustified rent hikes, further boosting confidence in the real estate market.
Understanding the New Index
