First rental index update of 2015: Dubai rents up 6-25%
Rents across some of Dubai’s master communities have risen by 6 to 25 per cent in the first rent index update of 2015 compared to the final rent index of 2014, a comparison done by Emirates 24|7 reveals.
Lease rates for apartments in International City, Dubai Silicon Oasis and Discovery Gardens have jumped by 9 to 18 per cent as per the first 2015 rent index compared to the last update of 2014.
The highest increase has been recorded in Remraam, where two-bed units have seen a rise of 13.13 per cent to 25 per cent.
The rent index is updated by the Real Estate Regulatory Agency (Rera), the regulatory arm of Dubai Land Department, every four months.
Rents for studio apartments in International City, the cheapest among major communities, are up by 14.28 per cent on the high band. Rates start at Dh30,000 to Dh40,000 per annum as against Dh30,000 to Dh35,000 pa in 2014’s final rent index.
Leases for studio units in Dubai Silicon Oasis and Discovery Gardens have both registered an increase of 12.5 per cent and are currently between Dh35,000 and Dh45,000 pa and Dh45,000 to Dh55,000 pa, respectively.
Downtown Dubai remains the most expensive community to rent a studio apartment though rents have risen between 6.66 and 7.69 per cent compared to the 2014’s final rent index. Leases range between Dh70,000 and Dh80,000 pa.
Rents for one-bed apartments remain the lowest in International City and Dubai Investment Park. One beds in the two communities stand at Dh40,000 to Dh50,000 pa.
The highest increase in two-bed apartment has been recorded in Remraam, with the upper band of the index increasing of the index increasing by 25 per cent. Leases vary between Dh75,000 and Dh85,000 pa compared to Dh60,000 to Dh75,000 pa.
Lease rates of one and two-bedroom apartments in Jumeirah Lake Towers (JLT) and Palm Jumeirah have remained stable. Rents for one- and two-bed units remain at Dh130,000 to Dh160,000 pa and Dh180,000 to Dh230,000 pa, respectively.
Similarly, lease rates for one- and two-bed units in JLT stand at Dh80,000 to Dh100,000 pa and Dh120,000 to Dh150,000 pa, respectively.
Dubai Marina saw rents for studio and two-bed apartments increase as well. Rates for studio units rose by 9 to 11 per cent with leases varying between Dh70,000 and Dh80,000 pa, while rates for two beds vary between Dh140,000 and Dh190,000 pa, showing an increase of 11.76 per cent for the upper band.
In fact, the Dubai government has issued Decree No. 43 of 2013 concerning the percentages of maximum property rent increase that are to be allowed upon renewal of tenancy contracts. The rent increase slabs are as follows:
# No rent increase if the rent of the property unit is less than 10 per cent of the average rent of a similar property in the same residential area.
# If the rent value is between 11 and 20 per cent less than the average rent of a similar property, the maximum rent increase shall be equal to 5 per cent of the rent value.
# If the rental value of a unit is between 21 and 30 per cent less than the average rent of a similar unit, the maximum rent increase shall be equal to 10 per cent of the rental value.
# If the rental value of a property is between 31 and 40 per cent less than the average rental of a similar property, the maximum rent increase shall be equal to 15 per cent of the rental value.
# If the rental value of a property unit is less than 40 per cent or more of the average rent of a similar unit, the maximum rent increase applicable is of 20 per cent.
The average similar rental value of the property will be determined by the Real Estate Regulatory Agency's rent index, the decree states.
It is also expected that Rera will unveil a more detailed rent index this year which will take into consideration various factors such as views from the apartment and facilities in a tower, age of the building, etc. when revealing the average rent for the apartment.
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