UAE Property: ‘Will energy-efficient features increase my house’s resale value?’
Question: I’ve heard that many new villa communities in Dubai are being built with smart-home and energy-efficient features. Should I expect those as standard, or will I still need to pay a premium for these amenities? What difference will these features make when I decide to sell or rent? SP, Sharjah
Answer: In recent launches across Dubai, especially in newer master communities and developments targeting high-end buyers or families, we are beginning to see smart home features and energy-efficiency measures integrated as standard, having before been add-ons.
Firstly, I need to point out that these features are not universally standard yet and they still carry varying premium values, so you may need to pay a little extra for the privilege. What is important, though, is that the premium is becoming more measurable and the value differential between smart/eco-spec villas and ordinary ones is increasing.
What we see as standard are smart homes with voice-controlled lighting and air-conditioning, solar-ready rooftop infrastructure, smart metres, efficient reflective glazing, intelligent leak sensors and, sometimes, electric vehicle charging points. Developers such as those in Dubailand, Dubai Hills 2 and some Al Furjan master communities are marketing these as standard in premium phases.
In terms of the rental or resale effects, for tenants these features deliver lower utility bills, better lifestyle convenience and, therefore, will command higher demand. A survey by a brokerage in Dubai in the first half of 2025 showed that villas with smart or green credentials attracted 8 per cent to 12 per cent higher rental levels and 4 per cent to 7 per cent higher resale prices, compared with similar units that didn’t have them.
Among the questions to ask are: was the smart/eco-spec part of the base price or added as an upgrade? If it’s an upgrade, you’re already paying extra and may need to model the return. Also, ask about which certification or standard was used? I am referring to building standards such as Leed, Well, Estidama or a Smart Living label. Ask whether it’s just marketing.
Look out for service charges. Sometimes these are higher for smart/eco buildings due to extra systems, so check the net yield.
Also, check the timeline. For villas handing over in late 2026 to 2027, the “premium” gap is narrower. This means you will pay less now than if you bought the same property in 2019.
To sum it up, if you are buying for the long term (more than five years) or for rental yield, prioritising smart/eco-features could be a smart decision. However, if you are buying for short-term resale (less than one to two years), the premium may not be fully realised yet. Either way, you’re future-proofing.
Q: I’m a tenant in Dubai and my landlord has issued a renewal notice with a large rental increase over and above what is permitted by the Smart Rental Index. I’m keen to keep good relations with my landlord but do not want to be taken advantage of. Beyond the rental index and standard protections, are there ways of negotiating that tenants typically overlook? What so you suggest to get on more of an even keel? CK, Dubai
A: There are ways to negotiate, assuming you have a landlord who is reasonable and you have maintained a good business relationship with him over the years. While many tenants know about the Dubai Land Department’s Smart Rental Index and renewal notice rights, few utilise the strategic negotiation levers available in today’s market.
As rents rise, smart tenants can bring value or stability to the table and that can sometimes soften inevitable increases. It’s important to know you have every right to refuse increases above what the index states is permissible, but sometimes – and for the sake of keeping good relations going – tenants have to think outside the box to maintain their position.
My advice would be to try some of the following tactics, which have helped others in the past.
Try offering a longer-term lease. Instead of renewing for just one year at a time at a higher rent, propose a two or three-year term with a moderate increase. Some landlords value stability, especially if you have already built a good reputation as a tenant.
Perhaps ask for non-monetary concessions. If the proposed rent hike is high, you might be better off negotiating for improvements, such as new AC, better landscaping or upgrades to the kitchen or bathrooms.
Look for upcoming supply in your building or area. If you are aware of hundreds of new units coming into the market near you, it would be advisable to remind your landlord of the competitive pressure to retain your tenancy.
If your landlord insists on a higher renewal price, counterbalance this by suggesting to pay the rent in several post-dated cheques. This should boost your negotiating power.
Ensure the correct notice period compliance. In Dubai, the 90-day written notice is a critical legal lever. If the landlord fails to provide this timely notice in writing (by email is fine), any increase can be challenged.
Lastly, where possible try to use professional representation. A well-prepared email referencing comparables and your tenancy history could shift the tone from “tenant begs” to “tenant negotiates professionally”.
So, you can see that tenants potentially do have leverage. By offering value (in the form of longer term tenancy, reliability or improvements) and exercising timing wisely, hopefully you can negotiate any rent increase down significantly. Treat your renewal not as a passive acceptance, but rather as a negotiation opportunity to balance proceedings.
The opinions expressed do not constitute legal advice and are provided for information only. Please send any questions to [email protected]
link
