'Rental index not in sync with reality'

21.05.2015
A Gulf News report revealed that both landlords and tenants are demanding rental values that are not recommended by the RERA index.

The Real Estate Regulatory Authority's (RERA) rental index may not match reality, according to recent research.

A Gulf News report revealed that both landlords and tenants are demanding rental values that are not recommended by the RERA index.

"Once we checked our database, we found that almost every tenant [or landlord] was demanding [rates that are not within] the rental floors and ceilings defined by Rera's index for a certain locality," Haider Ali Khan, CEO of property portal Bayut.com and co-founder of Zameen.com, told Gulf News.

"We think the rents are being compromised in anticipation of new units that are expected to hit the market soon."

According to Cluttons, the residential rents in Dubai have continued to slowly soften, but the real estate watchdog's index is somehow not in sync with the market conditions.

With the index still lagging reality, it is likely that landlords and tenants will settle for “off-grid” deals.

“With the Rera Rent Index system yet to evolve into a complex rental matrix that factors variables such as views, size of units, age of the building, etc., it will continue to lag reality, leaving tenants somewhat constrained by a rental index that does not fully reflect market conditions,” said Faisal Durrani, Cluttons’ international research and business development manager.

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