Dubai is always evolving, and the launch of the Smart Rental Index 2025 is a perfect example of how the city is making progress in improving its real estate market.The Dubai Land Department (DLD) unveiled this innovative tool to help residents, homeowners, and investors make more informed decisions when it comes to renting or owning property. Whether you're a tenant looking for fair pricing or a landlord aiming to maximize returns, the new Dubai Smart Rental Index is here to help.

What is the Dubai Smart Rental Index 2025?

The Smart Rental Index 2025 is a new tool developed by the DLD that offers greater transparency in the rental market. It helps tenants, investors and landlords by providing clear guidelines on rental pricing. The index features a new classification system that determines if a unit's rent can be increased based on specific factors. The goal is to create a fair and transparent environment where all parties like tenants, landlords and investors are treated equitably.

How Does It Work?

The index is powered by artificial intelligence (Al), which ensures an unbiased, consistent evaluation across all residential areas in Dubai. Al plays a key role in providing a fair and objective analysis of each property ensuring that rental increases are based on logical and transparent criteria. This technology guarantees a uniform approach across key districts, free zones and special development zones delivering an accurate and reliable assessment.

Updated Building Classification System

The Smart Rental Index uses a star-based classification system to rate properties from 1 to 5 stars, factoring in:

• Technical and structural characteristics

•  Quality of finishes and maintenance

• Strategic location

•  Services and facilities (such as maintenance, cleanliness, and parking management)

This ensures that rent increases align with the overall quality and value of the property, offering a transparent and fair assessment.

Rental Increase System

The rental increase is based on how much the current rent is below the average market rate.

This system ensures a fair and transparent approach to rent adjustments.

The Future of Dubai's Rental Market

The New Smart Rental Index 2025 is set to boost Dubai's real estate sector by attracting international visitors.

Ву increasing transparency and efficiency, it offers a strong foundation for foreign investment. This initiative will enhance Dubai's global reputation as a prime investment destination, drawing expatriates, professionals and investors worldwide.

Here's an example to illustrate:

Let's say you're renting a two-bedroom apartment in Business Bay. In 2024, the average rent for such an apartment ranges between AED 75,000 and AED 110,000 annually. If you're currently paying a rent that is 40% below the market value, your rent would be approximately AED 55,500.

Under the new rule, your landlord has the right to increase your rent by up to 15%, which means they could raise it by AED 8,325, bringing your new annual rent to AED 63,825.

Impact on Tenants

The new index is great news for tenants. It provides them with access to accurate and transparent rental data, which empowers them to make more informed decisions. Knowing that they are paying a fair price for their homes, tenants can negotiate better deals and feel more confident entering into Ejari rental agreements.

Impact on Landlords

Landlords can also benefit from the Smart Rental Index 2025. With access to reliable data, landlords can make informed decisions on rental pricing, ensuring they stay competitive while also maximizing their returns. The tool allows for better strategic planning by providing insights into market trends, helping landlords meet the evolving preferences of tenants.