The Official Rental Performance Index for the Emirate of Dubai
SEPTEMBER 2023
MO’ASHER
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CONTENTS
The Official Rental Performance Index for the Emirate of Dubai
September 2023
MO’ASHER
MO’ASHER
THE OFFICIAL RENTAL PERFORMANCE INDEX
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DUBAI RENTAL PERFORMANCE INDEX - MONTHLY
DUBAI RENTAL PERFORMANCE INDEX - QUARTERLY
MO’ASHER - THE OFFICIAL RENTAL
PERFORMANCE INDEX
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TOP AREAS
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METHODOLOGY
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In September, the tenancies market reached 54,699 registered leases, of which 56.67% were new contracts while 43.33%
were renewed. The annual contracts acquired 93.33% of the total contracts, while 6.67% were non-annual. The registered leases for residential purposes acquired around 68.76% of the total contracts, while 30.30% were registered for commercial purposes.
September’s rental contracts witnessed a 7.73% increase compared to September 2022, supported by the renewed contracts, which increased by 14.6% along with the annual contracts, which witnessed a significant year-on-year growth of 13.53% and 4% compared to August 2023.
By registering 16,576 contracts, the rental leases for commercial purposes witnessed an increase of 19.17%
compared to September 2022 and 8.65% compared to August 2023. The rental leases for residential purposes witnessed a moderate year-on-year increase of 3.48% compared to September 2022 and 0.34% compared to August 2023.
Q3 2023
In Q3, the rental market reached 156,422 leases compared to 140,685 contracts in Q3 2022, in which the tenancy leases rose by 11.19% where 54.19% were new contracts while 45.81% were renewed leases.
The renewed contracts witnessed a significant year-on-year increase of 23.36% along with a 17.05% increase compared to Q2 2023, while the new contracts grew by 20.97% compared
• September had a total of 54,699 rental contracts, of which 56.67% of contracts were new and 43.33% were renewals.
• In September, 93.33% were annual contracts, while 6.67%
were non-annual contracts.
• 68.76% were registered for residential purposes, while 30.30% were for commercial purposes.
• Q3 2023 had a total of 156,422 rental contracts, of which 54.19% were new and 45.81% were renewals.
• In Q3, 92.53% were annual contracts, while 7.47% were non-annual contracts.
• In Q3, 69.74% contracted for residential purposes, while 29.22% were registered for commercial purposes.
• Overall monthly Index recorded 1.083 and an index price of AED 58,837.
• Apartments monthly Index recorded 1.088 and an index price of AED 53,792.
• Villas/Townhouses monthly Index recorded 0.992 and an index price of AED 151,792.
• Overall quarterly Index recorded 1.08 and an index price of AED 58,036.
• Apartments quarterly Index recorded 1.104 and an index price of AED 53,005.
• Villas/Townhouses quarterly Index recorded 0.969 and an index price of AED 150,181.
Key Findings
Mo’asher Results:
“In September, the rental market saw a year-on-year increase of 7.73% compared to the same month in 2022. This growth was bolstered by the renewed contracts, which surged by 14.6%. Additionally, the annual contracts recorded a notable year-on-year increase of 13.53% and showed a 4%
increase compared to August 2023.”
“In Q3, the rental market registered 156,422 leases, a rise from 140,685 contracts in the same period of 2022. This represents an 11.19%
growth in tenancy leases, with 54.19% being new contracts and 45.81% renewals. Compared to Q2 2023, the tenant market experienced an uptick of 19.14%.”
to the same period. Looking at the timeframe for the contracts, the annual rents registered 144,733 contracts to rise by 20.83%
compared to Q2 2023, representing 92.53% of the contracts, while 7.47% were non-annual contracts.
The registered leases for residential purposes in Q3 witnessed a 17.25% increase compared to Q2 2023, representing 69.74% of the total contracts, while 29.31% were registered for commercial purposes, recording a remarkable increase of 23.46% compared to Q2 2023 and 19.79% compared to Q3 2022.
Top Areas by Ejari Registrations
The top areas according to Ejari Registrations for the most rental transactions in September 2023 were AL Mararr (2,280 contracts), Jabal Ali First (1,803), Hor Al Anz (1,738), Business Bay (1,734), Al Barsha South Fourth (1,613), Al Warsan First (1,596), Marsa Dubai (1,576), Nadd Hessa (1,256), Al Barsha first (1,193) and AL Thanyah Fifth (1,164).
Top Areas by Demand
According to Property Finder’s proprietary data, the top searched areas for apartment rentals in September were Dubai Marina, Business Bay, Downtown Dubai, Jumeirah Village Circle and Jumeirah Lake Towers. While the top searched areas for villas/townhouses were Dubai Hills Estate, Jumeirah, Al Barsha, Damac Hills 2 (Akoya) and Arabian Ranches.
Senior Director of Real Estate Studies & Research Dept Dubai Land Department
Latifa Ibrahim Ahmed Fouad Bekkar
VP of Data & AI Property Finder Group
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DUBAI RENTAL
PERFORMANCE INDEX MONTHLY
DUBAI OVERALL MONTHLY INDEX
In September 2023, the Overall monthly Index recorded 1.083 and an index price of AED 58,837.
Month-on-Month 3 Month Change 6 Month Change
+ 1.12%
+ 2.95%
+ 5.35%
3 Month Change 6 Month Change
+ 0.93%
+ 2.74%
+ 5.22%
Month-on-Month
Month-on-Month 3 Month Change 6 Month Change
+ 1.02%
+ 3.44%
+ 4.75%
DUBAI VILLAS/TOWNHOUSES MONTHLY INDEX
Year - Months Index base January 2013
DUBAI APARTMENTS INDEX
INDEX VALUE September 20231.088
INDEX NUMBER
DUBAI VILLAS/TOWNHOUSES INDEX
Year - Months Index base January 2013
INDEX VALUE September 2023
0.992
INDEX NUMBER
DUBAI APARTMENTS MONTHLY INDEX
In September 2023, the Apartments monthly Index recorded 1.088 and an index price of AED 53,792.
In September 2023, the Villas/Townhouses monthly Index recorded 0.992 and an index price of AED 151,792.
MO’ASHER
DUBAI OVERALL INDEX
INDEX NUMBER
Index base January 2013 INDEX VALUE September 2023
1.083
Year - Months
0 0.2 0.4 0.6 0.8 1 1.2 1.4
May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6
May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6
May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-19 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23
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DUBAI RENTAL
PERFORMANCE INDEX QUARTERLY
Year - Quarter Index base Q1 2013
DUBAI APARTMENTS INDEX
INDEX VALUE Q3 20231.104
INDEX NUMBER
DUBAI VILLAS/TOWNHOUSES INDEX
Year - Quarter Index base Q1 2013
INDEX VALUE Q3 2023
0.969
INDEX NUMBER
DUBAI OVERALL INDEX
INDEX NUMBER
Index base Q1 2013 INDEX VALUE
Q3 2023 1.08
Year - Quarter
DUBAI OVERALL QUARTERLY INDEX
In Q3 2023, the Overall Quarterly Index recorded 1.08 and an index price of AED 58,036.
Quarter-on-Quarter 6 Month Change 9 Month Change
+ 2.76%
+ 5.16%
+ 7.14%
6 Month Change 9 Month Change
+ 2.79%
+ 4.94%
+ 6.77%
Quarter-on-Quarter
Quarter-on-Quarter 6 Month Change 9 Month Change
+ 2.76%
+ 3.86%
+ 5.33%
DUBAI APARTMENTS QUARTERLY INDEX
DUBAI VILLAS/TOWNHOUSES QUARTERLY INDEX
In Q3 2023, the Apartments Quarterly Index recorded 1.104 and an index price of AED 53,005.
In Q3 2023, the Villas/Townhouses Quarterly Index recorded 0.969 and an index price of AED 150,181.
0 0.2 0.4 0.6 0.8 1 1.2 1.4
2013Q1 Q2 2013Q3
2013Q4 2013Q1
2014Q2 2014Q3
2014Q4 2014Q1
2015Q2 2015Q3
2015Q4 2015Q1
2016Q2 2016Q3
2016Q4 2016Q1
2017Q2 2017Q3
2017Q4 2017Q1
2018Q2 2018Q3
2018Q4 2018Q1
2019Q2 2019Q3
2019Q4 2019Q1
2020Q2 2020Q3
2020Q4 2020Q1
2021Q2 2021Q3
2021Q4 2021Q1
2022Q2 2022Q3
2022Q4 2022Q1
2023Q2 2023Q3
2023 0
0.2 0.4 0.6 0.8 1 1.2 1.4 1.6
2013Q1 Q2 2013Q3
2013Q4 2013Q1
2014Q2 2014Q3
2014Q4 2014Q1
2015Q2 2015Q3
2015Q4 2015Q1
2016Q2 2016Q3
2016Q4 2016Q1
2017Q2 2017Q3
2017Q4 2017Q1
2018Q2 2018Q3
2018Q4 2018Q1
2019Q2 2019Q3
2019Q4 2019Q1
2020Q2 2020Q3
2020Q4 2020Q1
2021Q2 2021Q3
2021Q4 2021Q1
2022Q2 2022Q3
2022Q4 2022Q1
2023Q2 2023Q3
2023
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6
Q1 2013Q2
2013Q3 2013Q4
2013Q1 2014Q2
2014Q3 2014Q4
2014Q1 2015Q2
2015Q3 2015Q4
2015Q1 2016Q2
2016Q3 2016Q4
2016Q1 2017Q2
2017Q3 2017Q4
2017Q1 2018Q2
2018Q3 2018Q4
2018Q1 2019Q2
2019Q3 2019Q4
2019Q1 2020Q2
2020Q3 2020Q4
2020Q1 2021Q2
2021Q3 2021Q4
2021Q1 2022Q2
2022Q3 2022Q4
2022Q1 2023Q2
2023Q3 2023
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JABAL ALI FIRST
AL WARSAN FIRST
AL BARSHA SOUTH FOURTH
BUSINESS BAY
NADD HESSA
TOP AREAS FOR RENTAL TRANSACTIONS
SEPTEMBER 2023
Al Mararr 2280 Transactions Jabal Ali First 1803 Transactions Hor Al Anz 1738 Transactions Business Bay 1734 Transactions Al Barsha South Fourth 1613 Transactions Al Warsan First 1596 Transactions Marsa Dubai 1576 Transactions Nadd Hessa 1256 Transactions Al Barsha First 1193 Transactions Al Thanyah Fifth 1164 Transactions
HOR AL ANZ
AL THANYAH FIFTH MASRA DUBAI
AL BARSHA FIRST
AL MARARR
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HEDONIC IMPUTATION INDEX
Hedonic imputation indices use predicted prices, evaluated at fixed characteristics, based on the hedonic regressions for all time periods.
In doing so, it is possible to evaluate the period t prices of properties sold in period 0. There are multiple imputation techniques, but three common ones are: Laspeyres, Paasche and Fisher.
House price indices serve as important guides that consumers, financial institutions, governments and investors look to in order to understand the market movements of a particular city or country’s housing market. An index will allow one to show the value of an asset over time by tracking its performance. An index is created by selecting a base year in a data set and then indexing that number as 100, which is the natural base for what all other price points will be measured against. When an index is updated monthly it will produce an updated average house price as well as the % changes in price for a given time period such as the last three months, six months or twelve months.
Mo’asher will be created using a hedonic regression model, which is a model that is based on attributes such as view, property size, number of bedrooms and other important features in a property that have an impact on its value. These methods utilize information on the relevant property characteristics to estimate quality-adjusted price indices using regression techniques, though it may prove difficult to sufficient control for location. One of the challenges of building a property price index is to isolate the effect of the properties price change over time. Nevertheless, this is challenging because the quality mix in the real estate market is diverse. The characteristics of every property is unique, and it is hard to keep track of individual property features because they continue to be upgraded or modified without informing the authorities.
METHODOLOGY
LASPEYRES
The Laspeyres method imputes period t prices for the properties belonging to the base period sample S(0), evaluated at base period characteristics to control for quality changes. It is also known as a base period weighted index, and it provides a meaningful comparison over time. It helps answer the following question: what would be the relative price today of a real estate unit that was typically offered for sale in the base month.
The hedonic imputation Laspeyres index is an example of a single imputation index in which the observed prices are left unchanged.
Using the Laspeyres method, assuming that the log-linear hedonic model holds true for all t periods, the quality-adjusted price in period t is defined as:
PAASCHE
The Paasche method imputes base period prices for the properties belonging to the period t sample S(t), evaluated at period t
characteristics. It is also known as a current period weighted index, and reflects current trends. It helps answer the following question:
what is the price of a typical real estate unit today relative to the price of the same unit in the base month?
The hedonic imputation Paasche index is an example of a single imputation index in which the observed prices are left unchanged.
Assuming that the log-linear hedonic model holds true for all t periods, the quality-adjusted price Paasche index is defined as:
FISHER
The hedonic double imputation Fisher index is found by taking the geometric mean of the Laspeyres Price Index and the Paasche Price Index. It is deemed the ideal index as it corrects the positive price bias in the Laspeyres Price Index and the negative price bias in the Paasche Price Index.
Assuming that the log-linear hedonic model holds true for all t periods, the Fisher Price Index is defined as:
The Dubai House Price Indices are calculated using the hedonic double imputation Fisher index.
Disclaimer
At present, we do not provide any accuracy metrics, and although all due care and statistical rigour is taken with the index generation, we do not claim any forecast accuracy. Property Finder and the Dubai Land Department reserve the right to adjust methodologies at any given time, and these changes will be published with appropriate user notes. Users seeking financial guidance from the RPPI do so at their own risk and should note that some external macroeconomic features will not be captured in the model.
The RPPI should not be used for any commercial purposes, including pricing and investment decision making or performance measurement.
You can download a copy of the index from www.datafinder.ae
Propertyfinder FZ LLC, Dubai Media City, Shatha Tower, 15th Floor, Office #1505, P.O. Box 50954, Dubai, UAE Dubai Land Department, Deira, Bani Yas Road, P.O.Box: Dubai 1166, Dubai, UAE
RESEARCH
Fouad Bekkar VP of Data & AI Property Finder
Aasem Abou-Elezz
Data & Market Insights Manager Property Finder
Ahmed Mohammed Aloqal Senior Statistical Analyst
Department of Real-Estate Studies and Research Dubai Land Department
Manal Mahmoud Haroun Corporate Communication Officer Dubai Land Department
