More signs are emerging of a possible slowing down in Dubai residential rent increases – at least in some areas.
According to the brokerage firm Betterhomes, there is ‘increased rental inventory’, which means more homes are coming to market looking for tenants.
This is ‘reinforcing the trend of rent stabilisation in some areas in 2025’, according to Rupert Simmonds, Director of Leasing at Betterhomes. “Tenants in these sectors now have more options and are increasingly price-sensitive, while landlords who price competitively secure tenants more quickly.
“It’s important to keep in mind that rents have surged in recent years, so minor fluctuations are part of a healthy market cycle.”
In recent weeks, mid-market locations such as Discovery Gardens, Sports City and Deira have shown signs of some rental growth stability.
But tenants who have seen their rental payments shoot up 20%-40% in the last 3 years will take any drop in how much higher landlords are asking now as a definite sign of better times.
Property market sources say this is more of a slight cooling off in rental growth than any market correction.
New Dubai Rental Index exerts influence
It’s been just over 2 months and 2 weeks since Dubai launched the digital Rental Index, which tracks the market trends in real-time. Most important, it introduces the star rating system, where landlords are required to raise rents based on how their building scores in on 1-5 star basis.
Property market sources say that it would take another 3-6 months for the rental market to fully absorb the changes brought in by the Index.
Now, if some areas are starting to show more properties available for rentals, it suggests there is less scope for those landlords to demand higher rates, whether for new tenancies or renewals.
“The next key trend for the rental market is how long a listed property remains available,” said an estate agent. “If we narrow this down further, how long will a particular property that’s asking for a higher than market average rent stays open.
“If the trends for both show a longer duration of remaining unsigned, then it shows the market is clearly in the mood for rental stability.”
Or at least in parts of the city.
According to the Better homes report, February had 36,223 leasing transactions in Dubai, which is a 10% drop from January. “Renewals dominated the market, making up 59% of transactions,” it adds.
