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As of January 1, 2025, Dubai's Land Department has introduced an updated version of the rental index, previously known as the RERA rent calculator. Now branded as the Intelligent Rental Index, the update includes significant changes.
The primary innovation lies in the use of real-time data processed through artificial intelligence (AI) to calculate rental values. Unlike the previous system, rental rates will now be updated continuously rather than annually.
The new system considers three key factors to determine rental rates:
- Historical and current rental data from the Ejari system, encompassing both old and new contracts for more accurate calculations.
- Building classifications, rated from one to five stars, which will influence rental pricing based on quality and amenities.
- Location, emphasizing property attractiveness and convenience.
Currently, only buildings are evaluated, not individual apartments. Villas will be assessed at the property level, with this feature to be introduced at a later stage.
The new index offers greater transparency and precise market data for landlords and tenants. As per Decree No. 43 of 2013, the maximum annual rent increase remains capped at 20%, but the use of AI and real-time updates ensures more accurate adjustments.
This modernization aims to enhance market transparency and stabilize the rental sector, fostering trust among market participants.
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