Dubai tenants are unlikely to face sharp rent hikes at renewal, as the Smart Rental Index regulates increases, ensuring fair, data-driven pricing aligned with market trends and property classifications.
Minimal rent rises expected at renewal as Dubai’s Smart Rental Index steers increases
When Dubai resident Jasim Mohammed received an email notifying him of a rent hike for his Al Quoz apartment, the increase caught him off guard. Having lived there for three years, he had already seen his annual rent climb from Dh48,000 to Dh56,700. With his lease set to expire in March 2026, his property manager informed him of a further rise — pushing the rent up to Dh63,000.
Rather than debating prevailing market prices or comparing notes with neighbours, Jasim turned to a tool that many tenants across Dubai are increasingly relying on: the Dubai Land Department’s Smart Rental Index. After checking the index, he found that his building did not qualify for any rent increase, with the result clearly stating “not applicable”.
Armed with this information, Jasim emailed the real estate office, attaching the index outcome. The reply came swiftly — the proposed increase was withdrawn, and the rent remained unchanged at Dh56,700.
Since its introduction last year, the Smart Rental Index has begun to reshape how rent renewals are negotiated, property professionals say. Discussions that were once driven by subjective assessments are now increasingly based on official, building-specific data, making the process clearer and more balanced for both parties.
The revamped index relies on a detailed classification system that evaluates factors such as a building’s structural condition, quality of finishes, upkeep standards, location, space utilisation, and amenities including parking and cleanliness. Any allowable rent increase is calculated based on the difference between a tenant’s current rent and the average market rent for similar units, with permitted hikes ranging from zero to a maximum of 20 per cent.
How the rental index functions
Niral Jhaveri, Director of Property Management at Better Homes, told insider18 that tenants are increasingly consulting the index to ensure rent adjustments are justified.
“In many leasehold properties, we’ve seen either no increases or stable rents for specific unit categories,” he said. “The updated Rera calculator now lets users choose an individual building and review its data to determine whether an increase is allowed. This has introduced a much fairer system.”
Karamfila Jaknouz, Head of Commercial at A1 Properties, noted that rental pricing is now grounded in verified transaction data rather than speculative asking prices, leading to more realistic negotiations.
“Tenants are using the index far more proactively,” she said. “We’ve seen landlords reduce or even halt proposed increases after reviewing the permitted limits, opting for consistent occupancy instead of risking vacancies.”
She added that the index benefits everyone involved. Tenants gain transparency, landlords save time and avoid disputes, and the wider market enjoys greater stability over the long term.
Sharing a real-world example, Jaknouz said a proposed renewal for an apartment in Dubai Marina was reduced from about Dh225,000 to Dh205,000 once the index was applied.
Her advice to tenants is to prepare thoroughly before renewal talks. “Check the rental index, review recent transactions in your building, and negotiate using facts, not emotions,” she said.
From an agent’s standpoint, she added, the index has streamlined the advisory process. “We can now guide both landlords and tenants using clear, official benchmarks, which helps set realistic expectations on both sides.”
Why the index is important
Property manager Shabna Ibrahim said tenant awareness has grown significantly. “I frequently see tenants responding to rent increase notices by sharing screenshots from the rental index, showing that no increase is permitted,” she said.
As previously reported by insider18, residential rents in Dubai are still expected to edge higher in 2026 — by an estimated four to six per cent in certain neighbourhoods — even as new housing supply enters the market and competition among landlords intensifies.
That said, experts believe the Smart Rental Index is influencing how these increases are applied in practice, particularly for lease renewals. While strong demand is likely to keep upward pressure on rents in popular areas, the use of official, building-level data is helping to temper increases and providing tenants with clearer guidance on what landlords can legally charge.
Growing awareness among tenants
Beyond individual cases, tenant awareness of rental regulations has increased sharply over the past year. Social media groups, community forums and word-of-mouth discussions have played a role in spreading information about the Smart Rental Index and how it can be used during renewals. Many tenants now routinely check the index as soon as they receive a renewal notice, treating it as a standard step rather than an exception. This shift has reduced disputes and lengthy back-and-forth conversations, replacing them with quicker, evidence-based discussions. As more residents become familiar with the tool, experts expect fewer confrontations and a more predictable renewal process across Dubai’s residential market.
Impact on landlord strategies
Landlords, too, are adjusting their strategies in response to the index. Instead of relying on broad market trends or neighbouring listings, many owners are reviewing the official data before issuing renewal notices. This has encouraged some to focus on improving building quality, maintenance standards and amenities, knowing these factors directly influence classification and permissible rent increases. Property managers say this has led to better upkeep in several communities, as landlords aim to justify higher rents through tangible improvements. Over time, the index may incentivise quality-driven competition rather than price-led escalation, benefiting both tenants and the overall housing stock.
Looking ahead for Dubai’s rental market
As Dubai continues to attract new residents and investors, the rental market is expected to remain active and competitive. While demand pressures are unlikely to disappear, the Smart Rental Index is emerging as a stabilising force that balances growth with regulation. Analysts believe its role will become even more significant as supply expands and tenant expectations evolve. For renters, the index offers clarity and confidence; for landlords, it provides a structured framework for pricing. Together, these dynamics are helping shape a more mature, transparent rental ecosystem, reducing uncertainty and fostering longer-term tenancy relationships.
