Property regulatory authority in Dubai confirms new rent formula

A property index that will recommend rents for different types of homes in areas across Dubai has moved a step closer.

The Real Estate Regulatory Authority (RERA) has completed the formula that will define rent structures and is preparing to launch the index at the beginning of next year.

'The index will stop landlords exaggerating and increasing rents,' said Mohammed Khalifa bin Hamad, director of Owner's Relationship Management Department in RERA.

'RERA has defined the average annual rents for studios, one, two and three-bedroom apartments and compound and single villas,' he added.

Although the scheme will not be legally binding and is designed to act as an indicator for landlords that shows the fair rent rate for each unit in each building or compound, it is expected to be widely followed at a time when more regulation is coming into the property sector in Dubai.

It is hoped that it will create transparency over rent rates for each area and also help investors to prepare their strategies.

Meanwhile property investors hope the new real estate court, designed specifically to deal with disputes, will help clear the few clouds over Dubai's real estate market when it begins operations next month.

Currently, most people with disputes contact RERA in the hope a solution will be found.

The majority of cases do not make it to the civil court as investors are put off by a waiting period of anywhere between 18 months and three years.

However, with the new court, investors, end-users, tenants, contractors and developers will be able to have disputes heard in a much shorter time-frame.

Stricter building standards will be imposed in Dubai next year in a bid to increase environmentally-friendly practices.

Eisa Al Maidour, assistant director-general of Dubai Municipality for Planning and Building Affairs, said planning chiefs would develop a new legislative framework for green design that would be implemented in all new buildings across Dubai by January 1.

'Growing concerns about the adverse impact of such a fast paced urbanization have underlined the crucial need for sustainable, eco-friendly and energy efficient property development as well as the challenge of decreasing the emirate's ecological footprint,' he said.