Dubai: The Dubai Land Department (DLD) has unveiled the Smart Rental Index 2025, a significant step towards regulating and developing the emirate’s dynamic real estate sector. The announcement was made during a press conference at DLD headquarters, attended by key stakeholders including government entities, real estate companies, and DLD officials.
The Smart Rental Index integrates AI technologies and real estate expertise to deliver exceptional services that cater to the needs of all market participants. By enhancing transparency and fairness in determining rental values, the Index aligns with Dubai’s ambitious Digital Strategy and the Dubai Real Estate Sector Strategy 2033.
Transformative Approach to Rental Valuation
Majid Al Marri, CEO of the Real Estate Registration Sector at DLD, emphasized the transformative nature of the Smart Rental Index. “This index leverages artificial intelligence and an innovative building classification system to provide fair and accurate rental valuations, solidifying Dubai’s position as a global investment destination,” stated Al Marri.
He further highlighted the remarkable growth in registered rental contracts, exceeding 900,000 in 2024, an 8% increase compared to the previous year. “This surge reflects the growing confidence in Dubai’s real estate market, empowering all parties involved in rental agreements to make well-informed decisions and ultimately fostering long-term market sustainability,” he added.
Comprehensive Coverage and Advanced Classification
The Smart Rental Index encompasses all residential areas within Dubai, including key districts, special development zones, and free zones, ensuring standardized valuation and pricing criteria. Focusing solely on residential properties, the Index excludes commercial properties.
A sophisticated building classification system lies at the core of the Index. This system meticulously considers a comprehensive range of factors, including:
- Technical and Structural Characteristics: Building quality and structural integrity.
- Finishes and Maintenance: Quality of materials, finishes, and overall building maintenance.
- Strategic Location and Spatial Value: Proximity to amenities, transportation, and key landmarks.
- Services and Facilities: Availability and quality of services such as maintenance, cleaning, parking, and security.
By meticulously evaluating these criteria, the Index ensures accurate and equitable rental value determination, reflecting the true quality and advantages of each property.
Landlord Incentives and Quality Improvement
The Index incentivizes landlords to enhance the quality of their properties. By improving their building’s rating within the classification system, landlords can potentially increase rental values. “We have linked the index to the building classification system, encouraging owners to maintain and upgrade their properties, ultimately enhancing the quality of life for tenants and increasing rental value for owners,” emphasized Majid Al Marri.
Addressing Rising Rental Rates
Dubai has witnessed a significant increase in rental rates in recent years. The Smart Rental Index represents a proactive step towards formally regulating this sector and ensuring a more balanced and sustainable rental market.
Digitalization and Sector Growth
This initiative aligns with Dubai’s broader vision of digital transformation, as outlined in the Dubai Digital Strategy and the Dubai Real Estate Sector Strategy 2033. The latter aims to significantly boost the value of real estate transactions to AED1 trillion ($227.2 billion) by 2033, while doubling the sector’s contribution to economic diversification.
Previous DLD Initiatives
Prior to the launch of the Smart Rental Index, DLD has implemented several initiatives to enhance the real estate sector’s efficiency and transparency. These include online platforms for landlords and tenants to seamlessly register, renew, and cancel contracts, as well as online systems for assessing tenant credit ratings.
The launch of the Smart Rental Index marks a pivotal moment for Dubai’s real estate sector. By leveraging technology and data-driven insights, DLD aims to create a more transparent, equitable, and sustainable rental market, further solidifying Dubai’s position as a leading global real estate destination.
