RERA New Rental Index Set To Show Easing Rents And Fair Pricing

Anyone familiar with Dubai will know that normally each passing year sees Dubai’s already sky high rental prices being increased further towards the point of madness. On top of traffic, rent in Dubai it is safe to say, is not one of the things Dubai residents would have high on their lists of lifestyle benefits of living in the Emirate. With some workers spending over 60% of their income on renting a property in Dubai alone, the situation was getting a little out of hand. Landlords were very much in the position of power, with most tenants being expected to hand over at least 6 months rent, in most case 1 years worth of rent, before being able to take occupancy of their home. However the rapidly deteriorating freehold real estate market combined with the global economic crash has brought hope to Dubai tenants. Well that was the original idea.

In order to give a clear indicator of what rental prices should be, the Dubai Real Estate Regulatory Agency (RERA) released a rental index, which was to act as a guide to fair rental prices. However upon its initial release, the index wasn’t exactly an overwhelming success! The figures used to calculate prices were mid 2008 prices, when the Dubai real estate market was at its peak, and rental prices still sky high! It therefore bore no resemblance to the current market demand and rental prices, and therefore wasn’t exactly much use!

However RERA are now set to release a new an updated rental index using more recent market data, that should give a more fair indication of what rental prices should be in the current climate. Although it has not yet been fully completed, RERA have revealed a average price drop of 10-15 in some developments. This is still some way off the expected price drops and current market prices, but RERA say this the index is still undergoing completion, and these prices have been formulated using only a few developments rental prices. The full index should be released later this month. However will it fully show the drops being seen in rental prices, or will RERA have overstated prices yet again? Those who work in the sector believe prices have declined some 30% across the rentals for Dubai properties, but will the new rental index get it right this time? 

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