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RERA Rental Index Calculator

Posted by h4l on November 14, 2021
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In order to move further towards a more mature market and standardize the prices in different communities, Dubai Land Department has taken an initiative that allows tenants, landlords and agencies to calculate the rent of a property for the next year. The Rental Index Calculator not only mitigates a lot of ambiguities about the pricing trends, but also creates transparency in the market which assures all stakeholders that they are paying and getting the right price.

Currently, the pricing index can be calculated for 4 different categories that include residential, commercial, industrial and staff accommodation. However, the most commonly used feature is the Residential Rental Index as there are lot of variations in rent across numerous communities of Dubai.

The factors that identify the next year’s rent for residential property includes the type of the property, Contract End Date, The Community, Configuration (which means the number of bedroom) and the current annual rent (in case it is for a renewal).

There are certain regulations in place that allows the landlord to increase the rent up to 5% of the current rental value only if the annual rent is between 11% to 20% of the current market value. This current market value is a dynamic figure that changes within the system based on various variables like its demand, supply, infrastructure upgrade, connectivity and other features.

To elucidate an example of a two bedroom apartment in Al Furjan which might be currently rented for AED 65,000 per year whereas the current market value of 2 beds in Al Furjan is between AED 72,000 to 88,000 per year, the landlord here will be eligible to increase AED 3,250 per year based on the rental calculations.

An important thing to note about the rental index is the fact that is does not include DEWA, Chiller or any other Concierge services offered in Hotel and Serviced Apartments. Hence, if these added valued are augmented in any property, they need to be calculated separated.

The benefit of using RERA calculator is the fact that it simplifies the calculation and understanding of next year’s rent without too much hassle and creates and equilibrium in the market where tenants and landlords have access to information to make more informed decisions.

To access the RERA Rental Index Calculator you can visit h4l.me/rera or get in touch with Homes 4 Life where our representative will be happy to explain the rent variation.

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