'Dubai's new rent index is now updated and accurate'
The Dubai Land Department rent index is updated and accurate, a senior government official told Emirates 24/7.
“The data on the rental index is updated and accurate,” Director General Sultan Butti bin Mejren said when asked if Real Estate Rent Agency’s (Rera) index was reflecting the market reality and increases based on the new rent decree.
(Read: Mohammed issues new decree on Dubai rental increases)
He added that the new index will be launched during 2014 which will be a more detailed one without giving any more details.
A comparison with online rental listings revealed the rent index was still lower than asking rents.
Rents for two-bed apartments in Business Bay were at Dh100,000 to Dh130,000 per annum as per the index, while average asking rents varied between Dh115,000 and Dh150,000 per annum. Similarly for three beds in Downtown, as per the index, ranged between Dh230,000 and Dh250,000 pa, while market prices were Dh240,000 to Dh275,000 pa.
Studios apartments in Downtown were listed for Dh65,000 to Dh75,000 pa in the rent index, but market rates hovered between Dh75,000 and Dh100,000 pa.
As pointed out before the current index only gives an average range of lease rate in a locality and does not consider any other features such as services or view, which plays an essential role in determining rentals in residential localities such as Dubai Marina, Downtown Dubai and Jumeirah Beach Residence.
Although the index was not mandatory, the new decree has to be followed by landlords from the public and private sectors in Dubai including private development areas and free zones.
Mario Volpi, Managing Director, Prestige Real Estate, believes the impact will be felt at the time of renewal of agreements.
“In the past the balance of power was in favour of tenants, with this new decree the emphasis will be more in favour of the landlord thus balancing the situation between landlords and tenants.”
He adds: “Though that rental prices at the time of renewals will catch more people in the increase category, which means that more landlords will be happier though in the long run, a happy landlord will mean less of them trying to buck the system to evict tenants so hopefully less claims at the rent committee by tenants.”
Apartment rents (Dh per thousand)
(Rera index as on 22-12-2013)
(Compiled from online listings)
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