Rents in Dubai will increase—though at a moderate pace—around 10 per cent next year as demand continues to stay strong due to the influx of new residents into the emirates.
Real estate industry insiders say that high-end areas could see high rent increases due to limited new supply and strong demand from millionaires. Localities on the outskirts of the emirate will also see significant increases as residents will relocate to those areas due to high rates in central locations.
The rising population has been the main driving factor behind property rentals and price increases in the post-pandemic years. The emirate’s population reached 3.814 million on December 10 compared to 3.654 million at the end of last year, an increase of 159,522 year-to-date, according to Dubai Statistics Centre.
Due to the influx of new residents, rents have reached high. Earlier this week, a penthouse was rented for a record Dh4.4 million while a villa was leased for Dh15.5 million a year in October.
Upward trend in the coming year.
Since the influx of professionals, high-net-worth individuals, and people seeking greener pastures is expected to continue in 2025, rents in the emirate will maintain an upward trend in the coming year.
Rupert Simmonds, director of leasing at Betterhomes, said the rental market witnessed an average increase of approximately 15-20 per cent across most areas in 2024, albeit at a slower pace than the highs of 2022 and 2023.
As we look ahead to 2025, we anticipate a moderation in the growth rate, with an expected rise of around 5-10 per cent in rentals across the city. The cooling pace reflects increased supply from new property handovers and tenants' growing preference for securing long-term leases at current rates,” said Simmonds.
Haider Tuaima, director and head of real estate research at ValuStrat, said 2024 saw residential rents for new contracts increase 5 per cent for villas and 16 per cent for apartments. “The next 12 months are likely to see villa rents stabilising whilst apartment rents continue climbing up to 10 per cent.”
Andrew Cummings, head of the residential agency, Middle East at Savills, anticipates a 10 to 12 per cent overall increase in rentals in Dubai in 2025.
“Apartments are likely to see higher growth than villas, driven by strong demand for urban living, the influx of expatriates, and Dubai's continued appeal as a global hub. The limited supply of high-quality residential units, particularly in centrally located areas, is also exerting upward pressure on rents,” added Cummings.
“While some areas may see stabilisation due to new supply, the overall demand for rental properties is expected to outweigh supply in most submarkets, keeping rental values on an upward trend,” he added.
According to Ramjee Iyer, chairman and managing director of Acube Developments, the average rental increase was 10-15 per cent in 2024, however, prime areas saw up 20 per cent jump.
Echoing his industry peers, Yogesh Bulchandani, CEO of Sunrise Capital, said rental witnessed a robust surge of approximately 15 per cent in 2024, primarily driven by high demand for both luxury and affordable properties, fuelled by the city’s growing population and global investor interest.
“For 2025, I foresee an average rental increase of 10-13 per cent, with some segments, such as luxury properties, possibly reaching 15-18 per cent growth, particularly for short-term rentals.”
Where will rents mostly rise in 2025?
Bulchandani projected that luxury areas such as Jumeirah Islands and Al Barari will likely continue to see significant rent hikes due to limited supply and high demand while emerging hubs like Dubai South, benefiting from large-scale infrastructure projects like Al Maktoum International Airport, are poised for notable growth.
“Established neighbourhoods such as Jumeirah Beach Residence (JBR), Town Square, and Dubai Production City, may experience more stabilised growth due to the balance of supply and demand.”
Rupert Simmonds projected prime and waterfront locations like Dubai Marina, Palm Jumeirah, Downtown Dubai, and Jumeirah Bay Island will continue experiencing high demand, supported by limited supply and the influx of affluent expats and global professionals.
“These areas could see rental increases towards the upper end of the forecast range, around 10-12 per cent. Suburban communities like Dubai Hills Estate and Arabian Ranches may also see notable increases, driven by families seeking lifestyle-oriented, well-connected communities.”
The affordable neighbourhoods like Jumeirah Village Circle (JVC) and Al Furjan may see minimal rental increases of around 2-5 per cent, as they will absorb a higher volume of new property handovers. Outlying locations like Dubai South and International City may experience a more stabilised rental market due to competitive pricing and expanding housing options.
Ramjee Iyer sees popular locations with great amenities like Dubai Marina, Downtown Dubai, Palm Jumeirah and Business Bay will see further increases. Al Quoz, Jebel Ali Village, Al Barsha South, Al Warqa, and International City expect lower rental increases in 2025.
Haider Tuaima sees the highest rent increases in the lower end of the market, particularly in apartments located on the outskirts of Dubai.
