Prices could determined by building quality not area
Dubai is considering a change to its Rental Index that would make it more closely tied to specific buildings than to neighborhood or area trends. Although it is still only a proposal, if adopted, it would increase the transparency of the rate-setting process. It will also fall on the landlord or building owner to ensure that his rental demands are reasonable.
According to a senior source in the industry, “for too long, rent increases or demands have been about the area that particular property or building is in.” “According to the currently under consideration plan, Dubai’s new Rental Index will be based on the building’s age, quality, and other amenities. Rent adjustments will therefore be based on each tower individually rather than on the state of demand and supply in that particular area if there are 50 towers there. Uncertainty surrounds the prospect of developing a new villa index as the revised plan applies to only apartment block.
If approved, a change would take place at a time when rent increases of 15% to 25% have been the norm in most Dubai neighborhoods. Locations like the Palm, Downtown, and Dubai Marina have seen increases that are even greater than the national average..
In any case, the proposal ensures that landlords make transparent decisions about rental requests and represents the biggest revision to the Dubai Rental Index. However, how that is will be left up to the tenants’ discretion.