Dubai Land Department has updated its rental index for 2018 and added a new land rent index.

The index is used to determine rental rates for various types property in Deira, Bur Dubai and freehold areas in the emirate.

It is also a reference point in case of disputes between landlords and tenants.

If the current rent paid by a tenant is below market rates the maximum increase per year when it comes to renewing the contract is 20 per cent. This applies if the rent is 40 per cent below market value.

A rental increase of 15 per cent is allowed if the rent is 31-40 per cent below market value, 10 per cent if it is 21-30 per cent below and 5 per cent if it is 11-20 per cent below. If the rent is 10 per cent less than market value there is no increase.

“The rental index is based on a calculation of the increase in rental values, reflecting average rents in different areas, the rental value of registered leases, and the properties offered for leasing,” said DLD deputy executive director for rental affairs Mohammed Yahya.

The update, which occurs once a year, comes in the context of stagnant conditions in the emirate’s rental market.

Property consultancy CBRE said last month that residential prices and rents continued to soften in the third quarter, down 1 per cent and 1.5 per cent respectively from the second quarter.

A brief look through the index show prices for a one-bed in some areas like Jumeirah Lake Towers have remained the same, while substantial declines have been seen in others.

Some agents believe the calculator in its current form is not accurate enough as it does not take into account different building quality and views in some areas.

Prices for a one-bed

Business Bay
Dhs75,000-105,000

Discovery Gardens
Dhs55,000-Dhs75,000

Dubai Marina
Dhs70,000-110,000

Jumeirah Lake Towers
Dhs65,000-95,000

International City
Dhs35,000-40,000

Burj Khalifa
Dhs160,000-170,000

Palm Jumeirah 
Dhs100,000-155,000

Downtown
Dhs80,000-105,000

Source: Gulf Business