According to a knowledgeable individual, the Real Estate Regulatory Authority (Rera) index for Dubai has been modified, and it is anticipated that renters who have been living in properties for more than two years would be affected by this change.
Richard Waind, the Chief Executive Officer of Betterhomes, stated that the Rera calculation was revised on March 1st, increasing the likelihood that future renewals will be more comparable to rentals that are currently available on the free market. On the basis of a benchmark rent for each neighborhood, the calculator provides landlords and tenants with information regarding the amount of rent that can increase upon renewal.
Modification to the account
The most recent modification to the calculation is expected to have an effect on tenants who have been living in their current location for more than two years. These tenants are now likely to experience a greater increase in their rent upon renewal than they would have experienced before the change. In an interview with Khaleej Times on Wednesday, Waind stated, "I anticipate that this will mean that some tenants will consider moving or downsizing, while for other tenants, this may mean that they decide to take the plunge and purchase a property."
Increase in rents
In addition, he stated that the sector that is most likely to be affected is the region that has experienced the most significant increase in rentals over the course of the past two years, including the communities that are located in the center of villas and those that are located on the waterfront.
As a result of the change in certain regions, executives in the industry estimated that the rents could increase by anywhere from ten to twenty percent in the not too distant future.
Nevertheless, Waind anticipates that the modification to the calculator will be able to assist in bringing down rents over the course of time.
Open market prices
"Because of the prior calculator, there was a significant gap between the prices of renewals and those of the open market, which in turn meant that there was very little movement in the market. Because of this lack of movement, there was a shortage of available real estate, particularly in the most frequently visited villa communities. There is a possibility that an increase in renewal costs could stimulate the market, which could result in an increased supply of homes in certain neighborhoods and a minor decrease in open market rentals.
