What Dubai renters can expect in 2025

The emirate’s rental market looks set to continue to thrive as demand surges amid new developments.

According to recent media reports in outlets like Arabian Business, real estate analysts predict rental prices in Dubai will jump by an average of 18% for short-term leases and around 13% for long-term rentals in 2025 – based on the latest Land Department transaction data and current market trends

What’s driving these changes and what does it mean for renters and investors alike?
 

Why are rental prices on the rise?

So, what’s behind this anticipated surge? A big part of it is the influx of professionals moving to Dubai, attracted by its lively lifestyle and strong job market. Plus, property prices have been climbing steadily in recent years, making the rental market even more appealing.

With more buyers from around the globe eyeing Dubai’s lucrative rental opportunities, the demand for residential real estate is set to soar, say experts. Investors are eager to tap into this trend, looking to earn passive income from rental properties.
 

Current trends and future projections

Recent data shows that rental prices have already taken a noticeable leap, with an average increase of 13.5% in the first half of this year alone. By the end of 2024, there could be a potential climb of about 20%, paving the way for continued growth into 2025.

This upward trend is backed by the organic growth of Dubai’s real estate market, which includes rising property values, new residential towers popping up, and a surge in transaction volumes for both sales and rentals.

The Dubai Land Department reported that in Q3 2024, there were over 48,000 property sales, totaling more than AED 120 billion. That’s some serious activity, highlighting Dubai’s appeal as a prime spot for real estate investment.

Looking ahead, there will be a significant boost in housing supply, with around 182,000 new units projected to be completed between 2025 and 2026. About 76,000 of those units are expected to be ready in 2025, which should help meet the growing demand.
 

The impact of expats and tourists

The influx of expats and tourists is a major driver of rental demand in Dubai. As the city cements its status as a global hub for business and leisure, the ongoing development of tourist attractions and business facilities is bringing in more visitors and professionals.

This, in turn, fuels the need for both short- and long-term rental options. The rental market can get pretty competitive, especially during peak seasons when prices can skyrocket, particularly in popular areas like Downtown Dubai.
 

Tips for renters and investors

If you’re thinking about moving to Dubai or investing in the rental market, here are some tips to consider:
 

For renters:

Plan ahead: Given the anticipated rise in rental prices, it’s wise to start your search early. This will give you more options and potentially better rates before the market heats up.

Explore different areas: While popular areas like Downtown Dubai and Dubai Marina may have higher prices, consider exploring emerging neighbourhoods that offer competitive rates and good amenities.

Negotiate: Don’t hesitate to negotiate rental terms with landlords. With the increase in supply expected in 2025, landlords may be more willing to offer favourable terms to secure tenants.

Understand the market: Stay informed about market trends and rental price fluctuations. This knowledge can help you make better decisions and time your rental agreements effectively.
 

For investors:

Research the market: Conduct thorough research on the areas with the highest rental yields and growth potential. Look for neighbourhoods that are undergoing development or have upcoming infrastructure projects.

Consider short-term rentals: With the rise in tourism, short-term rental properties can be a lucrative investment. Platforms like Airbnb can help maximise your rental income, especially during peak tourist seasons.

Diversify your portfolio: If possible, consider diversifying your investments across different property types or locations to mitigate risks associated with market fluctuations.

Stay updated on regulations: Be aware of any changes in rental laws and regulations in Dubai, as these can impact your investment strategy and profitability.