Dubai’s real estate sector is one of the world’s top investment destinations, offering consistent growth and high returns. The industry is a significant aspect of Dubai's development, identity, and economy and a showcase for the city’s artistry, where imaginative architectural design brings its ambition and forward-thinking vision to life, making it the city of today.
In 2024, Dubai’s property market continues to grow. Transaction values rose by 7% in the first nine months of the year compared to 2023, reflecting strong demand for high-quality properties. A rising population and increasing global interest in the city’s unique lifestyle have strengthened its appeal.
To ensure this momentum remains sustainable, the Dubai Land Department (DLD) and the Real Estate Regulatory Agency (RERA) have introduced updates to the Rental Index this year. This new framework enhances clarity and equity within the real estate sector.
Below we uncover details of the latest RERA Rental Index update and the opportunities it presents for Dubai’s property industry.
RERA and the 2024 Rental Index
Since 2007, the Real Estate Regulatory Agency (RERA), part of the Dubai Land Department, has been influential in developing Dubai’s real estate sector. With the responsibility of overseeing tenancy contracts and resolving disputes, RERA ensures a competitive environment that aligns with global standards. By establishing clear guidelines, RERA supports both tenants and landlords in understanding the complexities of the market.
Built around the Rental Index, RERA’s regulatory model provides a reliable benchmark for determining fair leasing terms. Updated annually, it categorises properties by location, size, and type. The 2024 iteration refines this approach, supporting adjustments that reflect current trends. From the exclusive villas of Palm Jumeirah to the stylish apartments in Downtown Dubai, the index is a reliable reference for establishing rent prices. This helps both sides work from the same standards, maintaining balance in the market.
Effective March 1, 2024, the new tiered adjustment system provides a clear guide for landlords to tailor rents according to prevailing market conditions. For instance:
No increase is permitted if the current rent is up to 10% below market value.
A maximum 5% increase applies to rents 11%-20% below market value.
Rents 21%-30% below market value may increase by up to 10%.
Properties 31%-40% below market value can see an increase of up to 15%.
For properties over 40% below market value, the maximum increase is 20%.
This approach promotes balance, discouraging unjustified increases while aligning rents with existing market trends. Tenants and landlords are encouraged to use the RERA Rent Calculator to verify calculations, ensuring compliance with the new structure.
Anticipated Rental Increases
What Tenants Should Expect
Dubai's rental sector has seen significant growth over the past few years, further contributing to the rise in real estate costs. According to a 2023 report by global property consultancy Cushman & Wakefield, rental prices went up by 19% – a notable rise, though it was slightly lower than the 27% increase recorded in 2022.
Looking ahead to the upcoming years, tenants renewing their contracts can expect lower rent levels compared to those entering the market for the first time. Industry analysts are hopeful that the updated RERA Rental Index calculator will provide more stability, helping moderate future increases and allowing for a more predictable environment.
Luxury Villa and Waterfront Apartment Communities
Tenants residing in villa and waterfront apartment communities are likely to be the most affected.
Rental prices have surely risen over the past two years and recent updates to the Rental Index have introduced a wave of uncertainty among tenants. According to industry insiders, some tenants may begin exploring more remote locations further from the city centre, where pricing remains more competitive.
Despite this, demand for high-end properties in sought-after locations like Palm Jumeirah, Dubai Marina, and Downtown Dubai persists, pushing rental prices higher. These districts remain highly desirable, making them not only prime living spaces but also valuable investments in Dubai's property market. The combination of limited supply and continued popularity is likely to lead to further rent increases in the coming year.
It is important to consider how the revised RERA system could affect landlords and their properties.
Opportunities for Landlords
Landlords managing properties in Dubai’s most top-tier neighbourhoods can benefit from the updated Rental Index to stay competitive in the market. The index helps ensure that luxurious residences – whether ultra-modern villas in Emirates Hills or waterfront apartments on Bluewaters Island – are valued accurately, reflecting their unique appeal.
Luxury properties come with a premium price tag, but for landlords owning these residences, the guidelines provide clear reasoning for any rent adjustments. This ensures fairness and helps mitigate potential controversy. By adhering to these regulations, landlords can make informed decisions that align with market conditions while maintaining professional relationships, even in the face of rising prices. The index’s refined structure promotes greater market activity and supports consistent growth. This creates opportunities for landlords to expand their reach and position their properties to a broader target audience.
A Balanced Future for Dubai’s Rental Market
The 2024 Rental Index is not only a regulatory update but a necessary step forward for Dubai’s property sector, setting a standard for markets around the world. With the city’s population expected to exceed 4.5 million by 2030, the need for simple and reliable rental systems will only grow, highlighting why Dubai leads in real estate, as its prosperity is influenced by practical solutions.
The Rental Index further reinforces Dubai’s reputation as a city that rewards innovation, stability, and investment potential, laying the groundwork for an even more successful and balanced property market.
