New rules: Dubai landlords must give 90-day notice before increasing rent
Find out how rent hikes are calculated under AI-powered index
Dubai’s rental market has introduced new regulations requiring landlords to give tenants a 90-day notice before increasing rent, as part of the updated Smart Rent Index launched in January 2024.
The move aims to bring transparency and fairness to the city’s booming property sector, which has seen continuous rent hikes amid surging demand.
The new Smart Rent Index, developed by the Dubai Land Department (DLD), replaces the previous system, which was updated annually. The updated index now leverages artificial intelligence to provide real-time rental price updates and includes a star rating system for residential buildings. Unlike the previous zone-based approach, the new system assesses rental values at the building level, covering both freehold and non-freehold areas across Dubai.
Smart Rent Index: New rules
Under the new rules, landlords must notify tenants at least 90 days before a lease renewal if they intend to increase the rent. Failure to do so means they cannot raise the rent, even if the index permits it.
Additionally, if a previous version of the index allowed for an increase but the latest one does not, the new index at the time of renewal will determine the final rent.
How rent increases are calculated
The Smart Rent Index determines rent hikes based on the gap between the current rent and the area’s average market value. The permitted increases are as follows:
- If the current rent is less than 10 percent below the market value, no increase is allowed.
- If it is between 11 percent and 20 percent below market value, a 5 percent increase is permitted.
- A 10 percent increase applies if the rent is 21 percent to 30 percent below market value.
- A 15 percent hike is allowed for rents 31 percent to 40 percent below market value.
- If the rent is 41 percent or more below market value, a maximum increase of 20 percent is permitted.
These structured guidelines aim to prevent sudden and arbitrary rent hikes, ensuring that increases remain fair and proportionate.
Dubai’s rising rental market
Dubai’s property sector has been experiencing a significant rise in rental prices, driven by population growth and increasing demand. In 2024, rental rates increased for the 15th consecutive quarter, with apartment rents surging by 19 percent annually and villa rents by 13 percent. According to property consultancy Cushman and Wakefield Core, lease renewals also saw a 16 percent increase in the third quarter of 2024.
Authorities anticipate that the new index will help stabilise the market and reduce rental disputes by at least 20 percent. The Dubai Media Office has credited the Smart Rent Index with playing a crucial role in regulating rental prices and mitigating inflation in 2025.
Majid Al Marri, Chief Executive of the Real Estate Registration Sector at DLD, highlighted the significance of the new index in promoting transparency. “The Smart Rent Index helps curb inflation and enables stakeholders to make informed investment decisions based on reliable data,” he said in a statement.
The updated index has also contributed to a rise in lease registrations. In 2024, the number of registered leases in Dubai increased by 8 percent annually to more than 900,000, reflecting growing confidence in the real estate sector.