Based on the most recent Land Department transaction data and current rental trends, real estate analysts predict that property rental prices in Dubai will increase by an average of 18% for short-term leases and approximately 13% for long-term rentals in 2025.
With more than 72,000 units expected to be completed by 2025, a significant increase in the supply of housing is now under way. By giving tenants more options and maybe slowing the sharp rise in rental rates seen in recent years, the launch of these new developments is anticipated to have an impact on Dubai’s rent trends in 2025.
The effects of tourists and immigrants
One of the main factors driving Dubai’s rental demand is the increasing number of tourists and expats. The continuous construction of tourist attractions and commercial facilities is drawing in more tourists and professionals as the city solidifies its position as a major international center for business and leisure.
High-net-worth individuals (HNWIs) and migrants from all over the world continue to be drawn to Dubai. About 6,700 millionaires moved to the city in 2024 alone, which increased demand for upscale real estate.
Dubai is still a desirable location for real estate investors, even with the predicted slowdown in the growth of rental prices. The city outperforms international cities like London and New York with an average rental yield of 7%. The city’s advantageous location, strong infrastructure, and investor-friendly regulations all contribute to this positive return on investment. Additionally, a secure basis for ongoing rental demand is provided by the diverse economy and ongoing population growth, guaranteeing investors steady income streams.
Recommendations for investors and tenants
Here are some things to think about if you’re considering investing in real estate market or moving to Dubai:
Investors:
Investigate the market: Find out deeper details about the regions with the best rental yields and room for expansion. Seek out neighborhoods with planned infrastructure projects or those that are currently under construction.
Think about short-term rentals: As tourism increases, short-term rental properties may prove to be a profitable investment. You may increase your rental income, particularly during the busiest travel seasons, by using platforms like Airbnb.
Keep track of regulations: Keep updated of any modifications to Dubai’s rental laws and regulations, as these may have an effect on your profitability and investment plan.
Tenants:
Research various locations: Although well-known neighborhoods like Downtown Dubai and Dubai Marina might cost more, take into account newer communities that provide affordable costs and first-rate facilities.
Never be afraid of negotiating with landlords over renting arrangements. Landlords might be more inclined to provide favorable terms in order to attract tenants given the anticipated rise in supply in 2025.
Make a plan: It’s a good idea to begin your search early because rental costs are expected to climb. Before the market heats up, this will give you more options and possibly better rates.
The demand for eco-friendly residences and luxurious stays is predicted to rise in Dubai’s short-term rental market in 2025.
