Latest news with #SmartRentalIndex
Arabian Business
15 hours ago
- Business
- Arabian Business
Dubai Smart Rental Index bears fruit as landlords recalibrate pricing strategies
Tenants are successfully using Dubai's Smart Rental Index to challenge unjustified rent hikes, leading to fairer rental agreements and reduced conflicts with landlords, as the regulatory tool delivers on its promise to moderate extreme rental increases seven months after its introduction. The Index, launched by the Dubai Land Department (DLD) in January 2025, has shifted bargaining power towards tenants and created what brokers describe as a more balanced rental market, with data from the first half of 2025 revealing divergent trends across different price segments and neighbourhoods. Landlords are recalibrating their pricing strategies in response to the artificial intelligence-powered tool, which uses multiple data points including rental contract values, area averages, and building classifications to determine fair rental adjustments whilst requiring landlords to provide 90 days' notice for increases. 'Tenants have successfully used the index to challenge unjustified rent hikes, leading to fairer rental agreements and reduced conflicts between landlords and tenants,' said Ronan Arthur, Director and Head of Residential Valuation at Cavendish Maxwell. Experts say the framework has encouraged fair pricing by limiting landlords' ability to raise rents beyond set thresholds. Regulatory tool creates market discipline The new framework has created what brokers describe as a two-speed market, with luxury waterfront communities continuing to post gains whilst budget-friendly areas experience corrections. Several mid-tier and budget areas experienced significant corrections as the regulatory tool took effect. In Al Furjan, five-bedroom villas fell 12.9 per cent to AED 319,000 annually, whilst four-bedroom units declined 4.92 per cent to AED 234,000, according to Bayut's latest half-year report. Certain areas in Jumeirah Village Circle also reported decreases of up to 13 per cent for specific property types. International City and Discovery Gardens experienced rental declines during the first half, which Maxwell attributed to recent regulatory crackdowns on subletting and increased competition from higher-quality nearby units. 'The DLD Smart Rental Index, launched in January 2025, is beginning to limit extreme rental hikes, especially in communities with higher vacancy or ageing stock,' said Andrew Cummings, Head of Residential Agency at Savills Middle East. 'This is creating a more data-driven, transparent negotiation environment for tenants and landlords alike.' According to Bayut, budget-friendly properties saw increases limited to nine per cent, whilst mid-tier rentals generally rose by up to seven per cent – a marked moderation from previous years' double-digit spikes. Prime areas maintain upward pressure Despite the regulatory constraints, prime areas like Business Bay and Dubai Marina saw rental rates increase during the first half, driven by young professionals seeking proximity to Dubai's financial districts. 'Business Bay saw rental rates increase in H1, driven by high demand from young professionals and its proximity to Downtown Dubai and DIFC,' Maxwell said. 'Dubai Marina also saw rates increase, supported by continued demand for waterfront living, proximity to the beach and JBR.' The luxury villa segment showed particularly strong momentum, with properties in Emirates Hills, Jumeirah Golf Estates, and Dubai Hills Estate recording rental increases of up to 11 per cent, according to Cummings. 'Mid-market apartments in Dubai Marina, Downtown Dubai, JVC and Dubai Hills Estate recorded the strongest growth in H1 2025, with luxury villas in Emirates Hills, Jumeirah Golf Estates, and Dubai Hills Estate up by around 18 to 45 per cent in sales prices and villas seeing up to 11 per cent rental increases,' Cummings said. Dubai Hills Estate emerged as the standout performer in the luxury villa segment, with six-bedroom properties seeing a 52.5 per cent increase in asking rents to AED 2.31 million annually. However, despite the regulatory changes, short-term rental conversions continue to affect pricing dynamics in prime locations. The conversion of units to platforms like Airbnb has tightened long-term supply in Dubai Marina, Business Bay, and Jumeirah Village Circle. 'Short-term rentals have kept rents elevated in areas like Dubai Marina, Business Bay, and JVC by reducing long-term supply and increasing demand for furnished, flexible units,' Cummings explained. Arthur noted that in areas where landlords convert units to short-term rentals to capitalise on higher yields, fewer properties remain available for long-term tenants, driving up rents and making it harder for tenants to find affordable housing. Landlords adjust strategies as market balances The regulatory intervention has forced landlords to recalibrate their approach to pricing and tenant relations. Market experts emphasise that inflexibility on pricing could prove costly in the new environment. 'One crucial point for landlords: dead occupancy is expensive. Being inflexible on pricing can result in longer vacancy periods, especially in a market where tenants have more options,' Cummings warned. Despite the regulatory constraints, Dubai's rental market maintained robust activity levels. Data from Betterhomes showed 39,251 rental transactions in July alone, representing a 3.4 per cent month-on-month increase. New rental contracts accounted for 40 per cent of deals, up from 37 per cent in June. Supply pipeline expected to continue moderation Looking ahead, industry experts predict supply increases will help moderate rental growth in several key areas. Arthur expects rental prices may begin to moderate in developments within communities where high numbers of newly handed-over units are entering the market. 'Rental prices may begin to moderate and stabilise in certain developments within communities where a high number of newly handed-over units are entering the market,' Arthur said, pointing to Jumeirah Village Circle and Business Bay where high volumes of off-plan sales are being completed. However, areas currently attracting tenants due to their affordability may still see increases. 'Areas like Dubai South, Emaar South, and The Valley, which are currently attracting tenants due to their affordability, are likely to see further rental increases as demand rises and supply tightens,' he added.
Zawya
10-07-2025
- Business
- Zawya
Smart Choices and Ample Supply keep Dubai's rental market stable – Bayut & dubizzle
Dubai, UAE: Bayut and dubizzle, the UAE's leading property portals, have released their latest analysis of Dubai's most searched areas for property rentals in H1 2025. The data reflects the rental market entering a phase of healthy stabilisation, with long-term rents showing more measured shifts and short-term rentals continuing to attract steady demand. As new inventory enters the market, rental pressure is gradually easing, offering tenants greater choice and flexibility. Trends for Long-Term Property Rentals in Dubai Six months after the launch of the Smart Rental Index, Bayut's data suggests that long-term rental prices are showing promising signs of stability. While growth has been recorded in several areas and segments, the rate of change has become steadier. Affordable apartment rents have increased by 7%, but certain units in Bur Dubai and Deira have reported decreases of 6.19%. Mid-range apartment rentals have experienced 1% to 6% hikes in annual rates. Interestingly, asking rents for luxury apartments have generally decreased by 1% to 5%. Certain units in Dubai Marina and Downtown Dubai, however, have reported up to 3% increase in annual rent. Affordable villa rentals have surged by up to 9% in the prominent districts. Asking rents for mid-tier villas have generally risen by up to 7%, with the exceptions being 3 and 4-bed units in Al Furjan, and 4 and 5-bed units in JVC, which have recorded rent decreases of up to 13%. Luxury villa rentals have surged by up to 53%, with 5-bed units in Dubai Hills Estate reporting the highest price hikes subsequent to the influx of new inventory in Palm Hills, Golf Place Terraces and Maple. The 4-bed luxury villas, on the other hand, have reported a decrease of 1% to 9% across the board. The continued demand and lack of extensive supply has meant that villa rentals have remained competitive for landlords. Bur Dubai and Arjan have been popular for affordable apartment rentals, while DAMAC Hills 2 and Mirdif were preferred for villas. In the mid-tier segment, JVC and Business Bay have stood out for apartment rentals, with Al Furjan and JVC attracting the most interest from tenants for villa rentals. For luxury properties, Dubai Marina and Downtown Dubai have maintained their status as prime choices for apartments, while Dubai Hills Estate and DAMAC Hills were top picks for luxury villas. Short-Term Rentals: Consistent Demand, Area-Specific Growth Dubai's short-term rental market continues to expand across all pricing segments, with demand remaining strong for both monthly and daily rental formats—particularly in lifestyle-centric, centrally located neighbourhoods. Monthly Short-term Rentals. Dubai Marina, Downtown Dubai and Meydan City emerged as the top three luxury areas for monthly apartment rentals, with average rents ranging between AED 7.18k and AED 16.31k per month. In the villa segment, Palm Jumeirah and Dubai Hills Estate remained the most desirable addresses, underlining continued interest in waterfront and upscale suburban living. Monthly rent for high-end villas in these areas ranged between AED 93.33k and AED 171.43k. Jumeirah Village Circle (JVC) dominated the mid-tier segment for monthly apartment rentals, with an average rent of AED 7.09k. Business Bay and Al Barsha also remained popular, offering a mix of studio to 2-bedroom layouts starting from AED 4.63k. Budget-conscious renters gravitated toward International City, Bur Dubai and Deira, where monthly apartment rents ranged from AED 3.08k to AED 12.99k. DAMAC Hills 2 (Akoya By DAMAC) remained popular for affordable villas, offering family-friendly units available for AED 12.96k to AED 15.75k per month, depending on the configuration. Daily Short-term Rentals Downtown Dubai, Jumeirah Beach Residence (JBR) and Dubai Marina remained the top choices for daily luxury apartment rentals, owing to their premium locations and exclusive amenities. Average daily rents ranged from AED 516 to AED 762. In the villa segment, Palm Jumeirah continued to lead, with average daily rents reaching AED 6.96k. A 14.59% increase highlights a sustained demand for waterfront living. Business Bay, JVC and Al Barsha were the most sought-after mid-tier areas, with average daily apartment rents ranging from AED 384 to AED 472. Notably, JVC saw a 5.6% increase in apartment rental rates, averaging AED 415 per day. For budget-friendly apartments, Bur Dubai, Deira and Dubai Silicon Oasis (DSO) remained popular. With a 5.34% dip in rental rates, Bur Dubai remained a popular choice for budget-friendly daily rentals. Deira and Dubai Silicon Oasis (DSO) followed closely with average daily rents between AED 206 and AED 269. Commenting on the findings, Haider Ali Khan, CEO of Bayut and dubizzle, CEO of Dubizzle Group MENA and Board Member of the Dubai Chamber of Digital Economy, said: 'Dubai's rental market is starting to stabilise after a period of rapid growth. With over 72,000 new units expected this year, the pressure on rents is slowly starting to ease offering more breathing room and better choices for tenants. And with the rent-versus-buy debate picking up, especially now that prices are levelling out, we're seeing more people take a serious look at homeownership. The First-Time Home Buyer initiative launched by DLD is also nudging renters to consider making that leap, offering access to exclusive units and attractive financing. This is where agents, backed by tools like TruBroker™, play a key role in helping people explore their options and make confident, well-informed decisions.' About dubizzle: Operating under the umbrella of Dubizzle Group Holdings Limited, dubizzle is the UAE's largest and most trusted classifieds platform. With its intuitive interface and cutting-edge features, dubizzle has become the preferred marketplace for individuals and businesses seeking efficient transactions. The safe and reliable dubizzle services have made a key player in the megacity's real estate, helping buyers, renters, property managers and investors to navigate and negotiate for their desired properties. About Bayut: Bayut is the uncontested market leader when it comes to real estate portals in the UAE. With 4000+ real estate agencies choosing Bayut as their advertising partner, with over 400 million page views per year. +87.2 million visits, Bayut has successfully established itself as the number one platform people trust when it comes to property search. A technology driven platform, Bayut is known to keep innovation at its core with updated, detailed transactional and advertised insights, extensive area and building guides, and revolutionary new products and features, allowing end-users to make the most well-researched decisions when searching for properties in the UAE. Since Bayut was established in 2008, the company has seen accelerated growth, by focusing on increasing not only the number of real estate partners it works with, but also obtaining substantial traffic growth to claim the status of market leaders in the competitive real estate portal landscape in the UAE, with an extensive portfolio across all seven emirates.
Time of India
02-07-2025
- Business
- Time of India
UAE: What is Dubai's Smart Rental Index? How it's helping tenants fight unfair rent hikes
Tenants in Dubai are using the Smart Rental Index to negotiate fairer rent ChatGPT Dubai's rental market is experiencing a significant shift as tenants increasingly use the newly introduced Smart Rental Index to successfully challenge unfair rent increases imposed by landlords. This innovative index, launched by the Dubai Land Department in January 2025, is bringing balance and transparency to a market long criticized for unpredictable and often excessive rent hikes, especially in older buildings. Tenants Take Control: Real Cases Show How the Index Works Grace Jackson, leasing manager for Dubai at Huspy, told local media reporters that tenants are actively using the Smart Rental Index to contest and reverse unfair rent increases. 'Tenants are using the index to stop unfair hikes and successfully,' Jackson said. She shared real examples from Dubai's rental market: 'A landlord proposed a 25 per cent increase for a tenant. Using the Smart Index, we found the legal increase was only 10 per cent based on similar buildings and the law. After showing this, the landlord agreed to reduce the hike.' 'Another tenant in Dubai Marina challenged a 15 per cent rent jump. The Smart Index showed the market rent hadn't moved much for that building type. The landlord agreed to renew at the current rate.' These cases highlight how tenants, equipped with transparent and data-backed rent valuations, can effectively negotiate with landlords and avoid unjustified rental inflation. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch CFD với công nghệ và tốc độ tốt hơn IC Markets Đăng ký Undo What Makes the Smart Rental Index Different? The Smart Rental Index isn't just a number, it's a comprehensive system that evaluates buildings with a detailed classification method. The Dubai Land Department developed it based on multiple factors, including: Technical and structural characteristics Quality of finishes and ongoing maintenance Strategic location and spatial value Level of services and facilities such as cleanliness, parking management, and maintenance Grace Jackson said, 'The new index uses real-time data and building ratings to give more accurate rent estimates. In areas like Jumeirah Village Circle, for example, rents in older buildings have started to correct downward, while newer, well-maintained towers are maintaining or even increasing rent due to their higher building classification.' By accounting for the condition and services of each building, the index helps prevent landlords from applying blanket rent increases and instead encourages fair pricing aligned with property quality. Market Response: Landlords, Tenants, and Renewals According to real estate consultancy Cavendish Maxwell, data from the first quarter of 2025 reveals a notable rise in lease renewals, which is likely linked to the introduction of the Smart Rental Index. Renewals made up 70.1 per cent of contracts in Q1 2025, up from 61.1 per cent in Q4 2024 and 62.2 per cent in Q1 2024. This suggests tenants are feeling more empowered to negotiate and continue their leases under fair conditions. Jackson pointed out that while most institutional landlords comply with the index guidelines, some private owners still try to push for higher rent increases. 'However, tenants are now more informed. In Business Bay, one client was able to negotiate a better deal simply by showing the official index results. The landlord had no grounds to argue,' she said. Echoing industry peers, Jackson said the index has effectively slowed rent increases, especially in mid-range and older buildings. 'The index has made it harder for landlords to overprice units. It's brought more balance, especially in mid-range and older buildings.' A New Culture of Transparency and Fairness Jackson sees the Smart Rental Index as more than just a technical tool, it's a cultural shift in Dubai's rental market. 'Agents now spend less time in subjective negotiations and more time educating both parties on what the data shows. In short, the Smart Index isn't just a tech update, it's a culture shift. And it's long overdue.' Overall, the index is helping create a more balanced, transparent rental market that benefits tenants and landlords alike by making rental pricing more data-driven and fair.
Khaleej Times
01-07-2025
- Business
- Khaleej Times
How Dubai's Smart Rental Index helps residents negotiate unfair rent hikes
Tenants in Dubai are increasingly benefitting from the Smart Rental Index introduced as tenants are successfully challenging unfair and unjustified rent increases by the landlords. Therefore, rents in older buildings have started to correct downward six months after the introduction of Index as tenants successfully reverse landlord's decision to hike rents without a valid reason. 'Tenants are using the index it to stop unfair hikes — and successfully,' said Grace Jackson, leasing manager – Dubai, Huspy. 'A landlord proposed a 25 per cent increase for a tenant. Using the Smart Index, we found the legal increase was only 10 per cent based on similar buildings and the law. After showing this, the landlord agreed to reduce the hike. Another tenant in Dubai Marina challenged a 15 per cent rent jump. The Smart Index showed the market rent hadn't moved much for that building type. The landlord agreed to renew at the current rate,' said Grace. In January, the Dubai Land Department launched the Smart Rental Index 2025, which relies on an advanced building classification system that considers all technical and service-related aspects of properties. Each building is evaluated based on a comprehensive set of criteria, including technical and structural characteristics, the quality of finishes and maintenance, the building's strategic location and its spatial value, as well as the level of services and facilities available, such as maintenance, cleanliness, and parking management. ' The new index uses real-time data and building ratings to give more accurate rent estimates. In areas like Jumeirah Village Circle, for example, rents in older buildings have started to correct downward, while newer, well-maintained towers are maintaining or even increasing rent due to their higher building classification,' she added. Some landlords follow rules According to real estate consultancy Cavendish Maxwell, rental contract data from Q1 2025 showed a notable increase in the share of renewal agreements, likely driven by the introduction of the New Smart Rental Index, which aims to protect tenants from steep rent increases by regulating permissible rent adjustments based on comprehensive market data. Renewals accounted for 70.1 per cent of contracts in Q1 2025, up from 61.1 per cent in Q4 2024 and 62.2 per cent in Q1 2024. Grace Jackson added that most institutional landlords are following the rules set under the Smart Rental Index, but some private owners still try to push higher increases. 'However, tenants are now more informed. In Business Bay, one client was able to negotiate a better deal simply by showing the official index results. The landlord had no grounds to argue,' she added. Echoing other industry peers, she added that the Smart Rental Index has slowed down rent increases slightly. ' The index has made it harder for landlords to overprice units. It's brought more balance, especially in mid-range and older buildings.' A new era of accountability Grace pointed out that the introduction of the Smart Rental Index marks a new era of accountability. 'Agents now spend less time in subjective negotiations and more time educating both parties on what the data shows. In short, the Smart Index isn't just a tech update, it's a culture shift. And it's long overdue.' Overall, she added that this tool is making the Dubai rental market more balanced and data-driven, which benefits everyone by helping both sides make smarter decisions.
Khaleej Times
21-04-2025
- Business
- Khaleej Times
Dubai: Up to 20% drop in rents ‘healthy' for property market, says top developer
A 10-20 per cent drop in rents is healthy for the Dubai property market following a four-year rally, said a top developer. Rizwan Sajan, founder and chairman of Danube Properties, expects a correction in rents next year after a double-digit increase since the Covid-19 pandemic. 'Rental correction might come around 10-20 per cent next year, which is required and healthy because rentals have gone very high. A 10-20 per cent rental correction will help the market as investors are coming here what is happening around the world. Dubai benefits whenever there is uncertainty in the world. But at the same time, prices and rents should not go too high,' Sajan told Khaleej Times in an interview. As reported last week, some properties in Dubai have started to see a decline in rentals due to growing competition among landlords, the impact of the Smart Rental Index on older properties and the supply of new units pressuring rents down. But a wider drop in rents across more communities is expected to be felt next year. Danube Properties chief also attributes a strong pipeline of new supply which will hit the market next year for a drop in rents. According to Property Monitor, Dubai saw 7,848 units handed over in the first quarter of 2025. A total of 71,251 new units are likely to be delivered for the whole of 2025, 80,015 in 2026 and 58,766 in 2027. 'This substantial influx of new supply over the medium term will be a key factor to watch, alongside ongoing demand dynamics, as it may influence both property prices and rental rates,' said Betterhomes in its first quarter report released on Monday. 'We should see some correction in rentals next year when deliveries happen. Prices might also see some correction, but there is nothing to worry about for good developers who offer good quality and amenities,' Sajan said, adding that a lot of investors from the US and Canada are coming to UAE. 'Dubai always benefits whenever there is uncertainty globally,' he said. Shortage of quality contractors Danube Properties is among the top 10 developers in Dubai, delivering thousands of units so far. It delivered three projects ahead of schedule since the first half of 2024. The private developer has launched 34 projects, successfully delivered 18, with another 16 currently in various stages. Last week, it unveiled its latest residential project Sparklz by Danube, a 358-unit tower coming up in Al Furjan. Currently, Danube holds an impressive book value with construction spanning over 25.5 million square feet. Sajan said there is a shortage of quality contractors in Dubai as the emirate has seen a good influx of new foreign developers as well as local ones. 'Finding a good contractor is going to be very, very challenging. Selling properties will not be as big a challenge as finding a contractor because there are too many developers but the number of contractors is the same. Also, contractors like to work with only developers with good reputations because the property market is cyclical and this market has seen its share of ups and downs. And contractor could face a challenge if developer's reputation is good,' said Sajan 'There are not as many new contractors coming here as the number of developers. There is plenty of space for contractors to grow – more space for contractors than developers. More contractors from Oman, Bahrain, Saudi Arabia and India should come here because there is a lot of work here in Dubai and UAE,' he said. Danube's chief suggested that developers coming from other countries should bring in contractors as well to meet growing demand. For contractors, he noted, it is very easy to set up a company, hire workers, process visas for labourers and get approvals. 'Dubai is one of the easiest cities in the world to do business and work,' he added.
