Rents in Dubai are expected to rise by approximately 10 per cent next year, driven by the continued influx of new residents into the emirate. Real estate experts predict that high-end areas may experience significant rent increases due to limited new supply and strong demand from affluent individuals. Areas on the outskirts of Dubai are also likely to see substantial increases as residents seek more affordable options due to high rates in central locations.
The surge in population has been the primary driver behind the rise in property rentals and prices post-pandemic. According to Dubai Statistics Centre, the emirate's population reached 3.814 million on December 10, up from 3.654 million at the end of last year, marking an increase of 159,522 year-to-date. This influx has led to record-high rents, with a penthouse recently rented for Dh4.4 million and a villa leased for Dh15.5 million a year in October.
Looking ahead to 2025, the rental market is expected to maintain an upward trend as the influx of professionals, high-net-worth individuals, and those seeking better opportunities continues. Rupert Simmonds, director of leasing at Betterhomes, noted that the rental market saw an average increase of around 15-20 per cent in 2024, though at a slower pace compared to the highs of 2022 and 2023.
Simmonds anticipates a moderation in growth rates for 2025, with rentals expected to rise by around 5-10 per cent across the city. This slower pace reflects increased supply from new property handovers and tenants' preference for securing long-term leases at current rates. Haider Tuaima, director and head of real estate research at ValuStrat, observed that 2024 saw residential rents for new contracts increase by 5 per cent for villas and 16 per cent for apartments. He predicts that villa rents will stabilize in the next 12 months, while apartment rents will continue to climb by up to 10 per cent.
Andrew Cummings, head of the residential agency at Savills Middle East, forecasts a 10 to 12 per cent overall increase in rentals in Dubai for 2025. He notes that 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 in central areas is also exerting upward pressure on rents.
Ramjee Iyer, chairman and managing director of Acube Developments, reported an average rental increase of 10-15 per cent in 2024, with prime areas seeing up to 20 per cent jumps. Yogesh Bulchandani, CEO of Sunrise Capital, echoed similar sentiments, stating that rentals surged by approximately 15 per cent in 2024, driven by high demand for both luxury and affordable properties. He forecasts an average rental increase of 10-13 per cent for 2025, with luxury properties potentially reaching 15-18 per cent growth, especially for short-term rentals.
Bulchandani projects that luxury areas such as Jumeirah Islands and Al Barari will continue to see significant rent hikes due to limited supply and high demand. Emerging hubs like Dubai South, benefiting from large-scale infrastructure projects, are also poised for notable growth. Established neighborhoods like Jumeirah Beach Residence (JBR), Town Square, and Dubai Production City may experience more stabilized growth due to the balance of supply and demand.
Simmonds predicts that prime and waterfront locations like Dubai Marina, Palm Jumeirah, Downtown Dubai, and Jumeirah Bay Island will continue to experience 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.
Affordable neighborhoods like Jumeirah Village Circle (JVC) and Al Furjan may see minimal rental increases of around 2-5 per cent, as they absorb a higher volume of new property handovers. Outlying locations like Dubai South and International City may experience a more stabilized rental market due to competitive pricing and expanding housing options. Iyer sees popular locations with great amenities like Dubai Marina, Downtown Dubai, Palm Jumeirah, and Business Bay seeing further increases, while areas like Al Quoz, Jebel Ali Village, Al Barsha South, Al Warqa, and International City expect lower rental increases in 2025.
Tuaima anticipates the highest rent increases in the lower end of the market, particularly in apartments located on the outskirts of Dubai.
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