Some of Dubai’s most sought-after communities have seen rents going up by as much as 6-25% in 2015’s first RERA (real estate regulatory agency) index update, in contrast to the index last updated in 2014.
Investors and homeowners were absolutely delighted to know that apartments in Dubai Silicon Oasis, Discovery Gardens and International City had their lease rates rising by 9-18% in this year’s rent index update. In fact, the highest increase has been recorded in Remraam, where two-bedroom units have gone up by 13.13-25%.
Rent Soars Higher in Sought-after Communities
International City studio apartments, which happen to be the cheapest among Dubai’s major communities, have seen rents increasing by just over 14%. Rates fall between the 30,000 AED and 40,000 AED range annually, compared to 30,000 and 35,000 AED according to the previous year’s rent index.
Studio units in Discovery Gardens and Dubai Silicon Oasis register a 12.5% rent increase – leases starting at 45,000 AED and 35,000 AED respectively.
Downtown Dubai continues to offer the most expensive studio Dubai rent apartments; rents have gone up by as much as 7.6% in contrast to 2014’s last updated RERA rent index. Leases currently range between 70,000 and 80,000 AED.
Dubai Investment Park and International city offer the lowest rents for a single-unit apartment: between 40,000 and 50,000 AED annually.
Just to reiterate, Remraam has seen the highest recorded rent increase in two-bedroom apartments – the upper band index going up by 25%. Annual leases falling between the 60,000 and 75,000 AED range are now valued at 75,000 to 85,000 AED.
However, lease rates for singe and two-bedroom units in Palm Jumeirah and Jumeirah Lake Towers have remained unchanged.
There have been rent increases in Dubai Marina as well for studio and two-bedroom apartments. Studio unit rent has risen by 11% – leases falling in the 70,000 and 80,000 range annually. Rent for two-bedroom apartments now hovers between the 140,000 and 190,000 AED range, which registers an 11.76% upper band increase.
Rent Increase Slabs as Dictated by the Dubai Government
Regarding maximum percentage increase allowed at the time of tenancy contract renewals, the Dubai government has issues Decree no. 43 of 2013, allowing for the following rent increase slabs, where the average property value is determined by the RERA index:
- Rent increase not allowed if the property’s rent is under 10% of the average rent of a similar piece of property in the same area.
- If rent is between 11 and 20% less than the average rent of similar properties, the maximum rent increase allowed is equal to 5% of the rent value.
- If a unit’s rent is valued at 21-30% less than the average rent of similar units, the maximum increase allowed is equal to 10% of the rental value.
- If a property’s rental value is between 31-40% less than the average rental value of similar properties, the maximum increase shall be no higher than 15% of the rental value.
- Finally, if rental value is under 40% or higher of the average rent for similar units, the maximum rent increase allowed is 20%.
RERA has plans to reveal a detailed rent index before the end of this year which takes into account additional factors such as views, facilities, building age etc. to provide a more accurate average rent rate for apartments and villas for rent in Dubai.
To ensure you are getting the right percentage of rent from your property, you need to rely on an established real estate network in Dubai that can take care of all the formalities for you and have the paperwork processed seamlessly.