Dubai residents fear being unable to manage the rising rent costs following the update to the Rera index.
Abin George, a resident of Dubai for three years in his Jebel Ali apartment, has witnessed an annual rent increase of Dh19,000. As the Real Estate Regulatory Authority (Rera) index undergoes updates, the expatriate, having resided in the same property for an extended period, expects a rental hike higher than usual, according to experts.
“We are currently shelling out Dh59,000, but considering the new rental index, I believe rents are on the rise,” expressed George.
Despite the imminent increase, the expatriate has no plans to relocate. “I am employed in Abu Dhabi, and the convenience of our community’s location aligns with my daily commute,” he explained.
“Furthermore, should I decide to relocate at this time, I wouldn’t find a comparable apartment for less than Dh70,000 in the present market. The relocation itself would incur an additional cost of Dh5,000. Therefore, our intention is to remain in our current residence.”
Following the latest Rera calculator update, experts have indicated that rents might experience a potential increase of up to 20 per cent. Numerous residents have already observed rising rental costs, and according to a KT Poll, 55 per cent of participants stated their willingness to bear a 5 to 10 per cent hike in rent this year. Additionally, for 23 per cent of respondents, the anticipated increase could surpass 20 per cent.
Dreading hikes
Expat Rory, residing in Dubai Sports City, is already losing sleep over the upcoming rent hike notice this year, as his tenancy contract is set to expire in June. Despite his landlord only increasing the rent by Dh5,000 per year in the past two years, Rory discovered that this year, the landlord is entitled to raise the rent by at least Dh19,000, which would be unaffordable for him. He emphasized that the proximity to his children’s school is the sole reason they are staying in their current residence, and while he has started looking for alternatives, the high costs are proving challenging.
Wasim Mohammed, a tenant in a four-bedroom villa in Mirdif, expressed concern about the impending renewal of his tenancy contract in December 2024. Having moved in 2021 with the agreement that the rent would remain fixed for three years, Wasim is apprehensive about the potential increase by the landlord. Currently paying below the Rera index due to the fixed rent agreement three years ago, he anticipates a significant rise in the upcoming renewal.
Nousheen, who resided with her family in a one-bedroom apartment in Discovery Gardens for four years, is faced with the challenge of finding a new place. Previously paying Dh42,000 annually, she revealed that her landlord insisted on a rent increase to Dh60,000 this year, citing market prices. Furthermore, she received a legal notice to vacate the property, making it difficult for her to relocate, especially considering the affordability and proximity to a metro station in the area.
