Industry executives report that tenants in certain parts of Dubai continue to pay rents below the Real Estate Regulatory Authority (Rera) Rental Index rates. In March, the Rera index was updated to align rental rates with market prices after more than three years of rising rents. The Index aims to represent the average market rent by considering all property locations and types across Dubai.
Anmoll D Shroff, founder and chairman of Elton Group, noted that areas like Dubai South and Damac Hills 2 are known for being more affordable compared to central and other prominent areas such as Dubai Marina, Jumeirah, and Jumeirah Lake Towers. Tenants in these peripheral districts often find their rents more manageable, particularly as they are located further from the city center where demand is highest.
Efforts have been made to enhance the transparency and fairness of the adjusted Rera Rental Index, with the goal of encouraging adjustments in rental prices across various neighborhoods. Shroff highlighted that the Dubai Land Department, through the 'Ejari' smart application, offers a Rental Increase Calculator to help tenants and landlords assess fairness based on the latest index rates.
Rupert Simmonds, director of leasing at Betterhomes, mentioned that there are certain areas and buildings in Dubai where rents are lower than the Rera Rental Index rate. He explained that while the Rera Rental Index serves as a guideline, actual rental prices can differ due to factors like the building's age, condition, amenities, location, and market demand. Affordable areas include older parts of Deira, Bur Dubai, and Karama, as well as more remote locations like International City, Al Warsan, Production City, and Jumeirah Village Circle.
Anisha Sagar, director of property management at Allsopp and Allsopp, pointed out that in some instances, apartments may be rented below the current market average. For example, tenants who have stayed in the same unit since before the pandemic might be paying less due to gradual rent increases based on their original lease terms. Additionally, older buildings in certain areas may have lower rents compared to newer buildings in high-demand locations like the main city center. It is crucial to remember that the Rera Rental Index is merely a guide, and actual rents can vary depending on various factors such as the property's location, size, and condition.
