RERA Rental Index
The rental index was introduced in 2009 in order to establish an average rental rate for properties within areas throughout Dubai including free zones.
Rental rate data was collected from various sources including Ejari Certificate registrations and an average rate was established every 4 months, 3 times per annum (January, May & September).
This revision is in effect from 2015, although we have encountered updates during this year it is claimed that no actual changes to the average rental rates occurred. This may have been a deciding factor in amending to once annually and may remain in effect while market conditions dictate.
As a real estate company that issues tenancy renewal notices to the Tenants on behalf of our Landlords it has been important for our review of the index to maximise any increases allowed and notify the respective parties at least 90 days prior to the tenancy contract expiry.
The Rental Index�s aim to provide transparency, trust and confidence between the Tenants and the Landlords is supported by Exclusive Links however it has been of our opinion that the broad criteria for pricing was not being considered or factored into and the average rates provided may not have been realistic for all properties.
If we select an area such as Dubai Marina and review a one bedroom apartment in order to assess the rental rates. There is a wide variety of considerations such as lower and higher end projects, prominent locations, quality of materials, views from the property, floor design and unit size, building amenities and nearby facilities and if the property is furnished or not. At this present time one bedroom apartment�s annual rental rate can start from AED 85,000 per annum up to AED 150,000 per annum. The rental index took an average rate and therefore individual properties and their respective values were not examined.
It is reported that RERA are planning to unveil a more detailed rental index which will take into consideration various factors such as views from the apartment and facilities in a tower, age of the building, etc., so more realistic and specific details will be reviewed.
Exclusive Links supports this decision and feel it�s another step in the right direction to enhance and improve the real estate segment in Dubai. However we would have suggested a bi-annual review and update of the Index as the market history prior to 2015 shows variance in rental rates from one quarter to the next.
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