New Rental Index unveiled

[Fran]

The Real Estate Regulatory Authority (Rera) unveiled a new rental index, which shows residents average rental prices they can expect to pay for villas and apartments in different areas of Dubai.

The long-awaited index will set the limit at which landlords can rent property at in each area.

It will replace the previous system whereby the government set an annual rental cap on the amount through which rent can be increased.

Rera will constantly update this rental price index to match market factors and changes and serve as a measurement to show to the general public a fair price for each unit. It will be used by developers to evaluate the rent income of the projects and the feasibility studies.

The system works by properties being given points for attributes such as building facilities, nearby retail outlets, as well age and condition of the building. The points are then used as a statistical base to set a minimum average and maximum average rent price.

 

[Roshan]

The Real Estate Regulatory Authority (Rera) unveiled a new rental index, which shows residents average rental prices they can expect to pay for villas and apartments in different areas of Dubai.

The long-awaited index will set the limit at which landlords can rent property at in each area.

It will replace the previous system whereby the government set an annual rental cap on the amount through which rent can be increased.

Rera will constantly update this rental price index to match market factors and changes and serve as a measurement to show to the general public a fair price for each unit. It will be used by developers to evaluate the rent income of the projects and the feasibility studies.

The system works by properties being given points for attributes such as building facilities, nearby retail outlets, as well age and condition of the building. The points are then used as a statistical base to set a minimum average and maximum average rent price.

Yawn Yawn...don't ever dream that this will work. Be assured there will be a another index after 6 months when everyone leaves.

There are lot of people leaving.

Roshan

 

[Fran]

As officials commented lately, the official and completed rental index will be released after two weeks. Also they said, as already the rental rates are going down, 5% rent cap is not needed, but will remain in place.

The rental index is not a regulation and can't be imposed neither on the tenants, nor on the landlords. It is only a guideline...

Basically, as I am figuring out, the rents will slide down to 2003-2004 level because of many people leaving and new units coming on the market.
Landlords are already facing lower offers and demands for flexibility.

Personally, I observed correction of up to 30% in the rental rates for commercial properties and up to 25% for the residential units.