Dubai has unveiled its new digital Rental Index, incorporating a star-based building classification system. This innovative approach allows landlords to set and adjust rents based on their building's rating, rather than just the area or district.

How It Works:

• The star rating applies to the entire building, not individual units.

• Owners of lower-rated buildings can upgrade facilities to improve their ratings, with changes taking immediate effect once approved.

• The index calculates rents based on the building's average rent and location, ensuring older, poorly maintained properties in premium areas can't demand high-end rents.

Key Features:

• It covers nearly all areas of Dubai, including freehold and non-freehold zones, but excludes commercial properties for now.

• Updates are done instantly, enhancing transparency and accuracy.

• Designed to reduce rent-related conflicts by up to 20%.

Benefits for Tenants and Landlords:

• Tenants in older, lower-rated buildings will pay rents aligned with their building's condition.

• Landlords can use the system to improve property value and appeal by upgrading their buildings.

With over 900,000 rental contracts signed in 2024 (an 8% increase from 2023), this AI-powered system is expected to streamline Dubai's rental market further. According to the Dubai Land Department, this marks a significant step toward building trust and clarity in the real estate sector.