The market is expected to see a major shift this year, with some of the affordable neighbourhoods transforming into sought-after residential hubs due to infrastructure development and better amenities.
Dubai Property Rental Market Set for Balanced Growth in 2024, with Key Shifts Expected in 2025
The Dubai property rental market is anticipated to witness balanced growth in 2024, with certain prime areas and property types experiencing a rise in rental rates. At the same time, the introduction of new properties is likely to ease the sharp increases seen in premium neighborhoods, according to industry experts.
A significant shift is projected for 2025, where areas once considered ‘affordable’ are expected to evolve into highly desirable residential hubs. This transformation will be driven by infrastructure improvements and enhanced amenities, attracting greater interest from tenants.
“We foresee continued rental growth this year, especially in specific areas and property types, with prime locations and upgraded properties leading the trend,” said Rupert Simmonds, Leasing Director at Betterhomes, in an interview with Arabian Business.
However, Simmonds noted that the large number of new property handovers in key locations will likely stabilize rising rents. “Areas with more new handovers might become more affordable than those with limited supply, offering tenants better value for their money,” he added.
Farooq Syed, CEO of Springfield Properties in Dubai, highlighted that the Dubai Land Department’s rental index will play a crucial role in maintaining market stability this year. “This will build greater trust among both tenants and investors,” he said.
Premium Rentals on the Rise in Dubai
Industry insiders predict that the biggest rental increases in 2024 will occur in premium property segments, such as luxury villas and high-end apartments, especially in exclusive neighborhoods like Palm Jumeirah, Mohammed Bin Rashid (MBR) District One, and Dubai Hills Estate.
This surge will add to the already significant rental hikes seen in villa communities like Palm Jumeirah. “High-end villas will see rent increases due to market dynamics, including the expiration of rent-controlled leases and extensive property upgrades that enhance value,” said Simmonds.
In the apartment sector, areas such as Downtown Dubai, Dubai Marina, and Bluewaters Island are expected to perform strongly. This is due to their vibrant city atmosphere, proximity to business hubs, and easy access to world-class dining and entertainment options.
Emerging communities like Jumeirah Village Circle (JVC) and Dubai South are also drawing increased attention. These areas offer affordable housing options without compromising on quality, thanks to ongoing infrastructure projects and new developments that boost their appeal.
Simmonds pointed out that with the introduction of new housing supply, even neighborhoods once considered premium may become more budget-friendly in 2024. “This shift gives tenants and buyers more options that fit their budgets while still offering quality homes in attractive locations,” he explained.
Despite potential changes, Simmonds emphasized that prime areas remain highly desirable due to their exclusivity, strategic locations, and the availability of exceptional properties entering the market.
Dubai Rental Market Trends for 2024 and Beyond
Simmonds believes the Dubai rental market will experience a balancing effect this year. He noted that rising prices in traditionally popular areas might push some renters to explore more affordable communities farther from the city center.
However, this could lead to a “pendulum effect” over time, where renters reconsider their priorities. Some may choose to pay slightly higher rents to live closer to work or key city areas rather than face the hidden costs of commuting from distant locations.
“Expect mixed results across different neighborhoods,” Simmonds said, as the market dynamics will vary depending on specific locations.
Looking ahead to 2025, industry experts predict that demand for rental and purchase properties will remain strong. Dubai’s growing population and its global reputation as a premier destination for living and investment will continue to drive this trend.
More people are actively registering to rent or buy properties, reflecting the ongoing vibrancy of Dubai’s real estate market. In addition, initiatives like the Dubai Smart Rental Index are fostering a transparent and fair environment for both tenants and landlords, paving the way for sustained growth.
“These initiatives, along with other regulatory measures, help ensure fair pricing, reduce disputes, and enhance confidence in the real estate sector,” Simmonds said.
Syed added that the AI-powered rental index, which evaluates properties based on factors like location, amenities, and eco-friendly features, will encourage landlords to invest in quality upgrades. This will contribute to greater stability in Dubai’s rental market in the coming years.