As of March this year, RERA updated the rental index, expecting rents in Dubai to rise by 20%. This may have an impact on tenants who have been residing in a property for over two years.

In recent years, Dubai's rents have been on the rise, but strict regulations set by RERA have limited the percentage by which landlords can increase rents. This has resulted in a significant gap between market prices and what long-term tenants actually pay.

The revision of the rental index by RERA expands the percentage by which landlords can increase rents, giving more landlords the authority to raise rents. Therefore, many tenants renewing their leases may face higher rents, thereby narrowing the gap between what they pay and market prices.

However, tenants need not be overly concerned. According to RERA regulations, landlords can only increase rents upon lease renewal and cannot arbitrarily raise rents during the tenancy. Therefore, potential rent increases will only occur when tenants' current leases expire.

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Many tenants opted to move into new residences earlier this year, meaning their leases will be up for renewal towards the end of 2024 or early 2025. Consequently, based on the new RERA rental index, these higher rents will take effect later this year or early next year.

In the past, more and more tenants chose to renew their leases because the renewal prices were often much lower than what they could find for new rentals in the market. However, with the revision of the rental index, landlords now have the right to align rent prices with the market, which may alter tenants' choices.

Despite rents continuously rising, there has been a slowdown in rent increases over the past few quarters. It is expected that with new housing supply entering the market in the latter half of this year, rent increases will further decelerate.

Although the RERA rental index adjustment allows landlords to increase rents, many tenants can also choose to move to lower-rent communities to balance the rental situation. This may alleviate the pressure of overall rent increases. However, in areas with already high demand, such as JLT, Jumeirah, and Al Barsha 1, rents may still increase.

Every landlord must adhere to the rental calculator set by RERA when increasing rents. According to the calculator's provisions, landlords can only increase rents within a certain range, depending on the difference between the current rent and market value.