Dubai-based Sumit Augustine has had a philosophical approach towards spending
The update was much-needed since residential rents have declined in several locations in the city so far this year. Those tenants who have been paying rents below the market average have been facing rent increases with every annual lease renewal.
"By definition, a rental index is a mechanism that is designed to protect the interests of both tenants as well as landlords. In an upward market [rising rents], it will, therefore, be pro tenant; conversely, in a downward market, it may be perceived as pro landlord," says Hussain Alladin, head of IR and research at Global Capital Partners.
However, it has been noticed in several instances across Dubai that landlords have been proactive in reducing rents and offering other flexible lease terms to attract new and retain existing tenants. This has shown up in data where rents have fallen by more than the DLD rent index.
"What the index does ensure is that the tenant's bargaining power is there and does not allow for rents to run away on the upside, thereby triggering inflation. Going forward, rents will continue to adjust based on demand/supply parameters [for the most part, the downward adjustment is reflected in the current index]," adds Alladin.
The new rental index includes all areas of the emirate and all types of property. For the first time this year, a land rent index has been added for plots with annually renewable lease contracts.
DLD's specialists have adopted a variety of mechanisms to carry out the upgrade, including reading the average data of tenancy contracts registered in the Ejari system and the real estate data and units registered in DLD's databases.
Mohammed Yahya, deputy executive director of the rental affairs sector at DLD, said: "The rental index is based on a calculation of the increase in rental values, reflecting average rents in different areas, the rental value of registered leases and the properties offered for leasing. Updating the rental index once a year limits conflict between the parties involved, especially as it is a reference that everyone can rely on."
In general, the rent index is updated once a year. This allows owners three months to notify tenants of updated lease values for the coming year.
- business@khaleejtimes.com
Dubai-based Sumit Augustine has had a philosophical approach towards spending
The regional upswing also defies oil production cutbacks
It's a treatise that would determine the course of your life, not just academically, but as a person too
A US-based company is developing an eVTOL aircraft for commercial passenger service and is expected to start operations by 2025 or early 2026
The project’s aim is to generate funds for Harmony House, an orphanage located in India's Gurgaon
Earlier, the Emergency, Crisis and Disaster Management confirmed the reopening of all roads in the emirate
His case was considered a milestone for #MeToo, in which women accused hundreds in entertainment, media, politics and other fields of sexual misconduct
Well-known communication expert Maha Abouelenein on what it takes to thrive in the age of social media