Dubai’s recent recalibration of its Real Estate Regulatory Authority (Rera) rent calculator has sparked a mixed response among tenants, with analysts predicting increased rents balanced by growing options in newer communities offering better value for money.
The Rera calculator, updated on March 1 to better reflect open-market pricing, periodically revises rental rates for certain communities and buildings based on current market conditions. This adjustment comes as Dubai’s rental market witnessed a 19% surge in 2023, according to property consultancy Cushman & Wakefield.
Navigating Rent Increases
Haider Tuaima, Director of Real Estate Research at ValuStrat, notes that the adjustment widens rental ranges in some areas, allowing landlords to align rates with prevailing market trends. While this may lead to disruptions for some tenants during renewals, it aligns with efforts to maintain competitive rental yields.
Cherif Sleiman, Chief Revenue Officer of Property Finder, highlights Rera’s aim to ensure fair rent increases across communities, fostering a healthy environment for investors and maintaining competitive rental yields.
Shift Towards Homeownership
Anticipating significant rent hikes during renewals, John Lyons, Managing Director at Espace Real Estate, suggests that more tenants may consider homeownership, attracted by lower monthly costs associated with owning a home. This shift could lead to increased stability in Dubai’s residential property market over the long term.
Impact on Tenant Mobility
Jacob Bramley, Senior Leasing Manager at Betterhomes, points out a two-fold consequence: while rent increases may prompt some tenants to vacate their properties, landlords have the opportunity to re-rent at higher rates. This could lead to increased demand in newer communities offering better value for money.
Balancing Stability and Demand
Despite potential disruptions, analysts suggest that the recalibration of the Rera calculator aims to strike a balance between stabilizing rents and fostering demand in Dubai’s property market. As the emirate continues to attract domestic and international investors, maintaining competitive rental yields remains a key focus for regulators.
Dubai’s property sector, a vital component of its economy, has shown resilience post-pandemic, attracting significant investment and registering record transactions in 2023.
