"Economics is driving prices, more than the rent index"

A guest blog from The National's Robert Ditcham, author of the story on the Rental Index:

Dubai's long-awaited Rental Index update has finally been released and the good news for tenants is that Rera's figures seem to be spot on. The recommended rental ranges included in the index correspond with current listings and recently published market studies from the likes of Landmark Advisory.  In a volatile market, landlords renewing existing rental contracts now know how much they can legally increase the rates by, if at all. Tenants, meanwhile, will have a government-backed point of reference to ensure that the amount they are paying is correct. But, as several analysts have questioned, how much relevance does the index really have?

"In this ever changing market with landlords reducing rents even further to protect income, it is clear that economics is driving the prices, more than the rent index," says Janine Crisp, head of department at the property management division of Better Homes. If the rental market sinks further or regains some lost ground, the rental index will soon become obsolete, once again proving that market forces rule.