Since January 2025, Dubai has been operating an upgraded rental regulation mechanism — the Smart Residential Rent Index. Its objective is to bring greater transparency and fairness to the rental market by accounting for actual building characteristics rather than relying solely on area-wide averages.

The new rental index shifts pricing logic from area averages to individual building quality.

What Is the New Rental Index?

The index is a digital system developed by the Dubai Land Department (DLD). It determines a fair rental value using artificial intelligence and data analytics based on the technical and qualitative parameters of buildings.

The assessment takes into account:

  • Architectural and structural characteristics
  • Level of services, including maintenance, security, and amenities
  • Energy efficiency
  • Location and transport accessibility

Each building is assigned a rating from 1 to 5 stars, and this rating now directly affects the permitted level of rent increase.

Use of Technology

The system processes large volumes of data, including registered tenancy contracts. Outliers are excluded, and weighted averages are applied, making the index resilient to sharp fluctuations and speculative pricing.

Pro Tip

Pro tip: Buildings with strong maintenance records and service quality benefit most from the new index, even within average-performing districts.

Who Benefits from the Index?

The index serves multiple market participants:

  • Tenants — to verify whether the proposed rent is fair
  • Property owners — to determine a justified level of rent increase
  • Investors — as a tool for yield assessment
  • Public and private entities — as a reference point for area and asset development

The index can be checked directly through the DLD platform.

How Is the Rent Increase Determined?

Rent increase limits continue to be regulated by the gap between the current rent and the average market rent defined by the index:

  • If the current rent is 21–30% below market, an increase of up to 10% is allowed
  • If 31–40% below market, up to 15%
  • If more than 40% below market, the maximum increase is 20%

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Can a Building’s Rating Be Changed?

Yes. Property owners may submit a request to DLD to review the building’s classification.

This typically applies after major renovations, façade upgrades, or service and infrastructure improvements.

What If an Agreement Cannot Be Reached?

If the parties fail to agree, the owner may apply to the Rental Disputes Center (RDC) for a rent reassessment.

An independent expert is appointed to determine an objective market rental value. Following review, an official valuation certificate is issued.

What Comes Next?

DLD plans to introduce similar indices for commercial and industrial properties, along with additional digital services aimed at simplifying interactions between all market participants.