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Home Sector Real Estate Dubai rental market stabilizes as demand for affordable, luxury options grows with over 72,000 new units expected: Report

Dubai rental market stabilizes as demand for affordable, luxury options grows with over 72,000 new units expected: Report

Strong demand for monthly and daily rentals drives growth in lifestyle-centric and centrally located areas 
Dubai rental market stabilizes as demand for affordable, luxury options grows with over 72,000 new units expected: Report
Long-term rental prices in Dubai show signs of stability amid new inventory surge. 

Dubai’s rental market entering a phase of healthy stabilization, with long-term rents showing more measured shifts and short-term rentals continuing to attract steady demand. As new inventory enters the market, rental pressure is gradually easing, offering tenants greater choice and flexibility, according to a new analysis of Dubai’s most searched areas for property rentals in H1 2025 from UAE-based property portals Bayut and dubizzle. 

Signs of stability in long-term rentals

Six months after the launch of the Smart Rental Index, Bayut‘s data indicates that long-term rental prices are showing encouraging signs of stability. While growth has been observed in several areas and segments, the rate of change has become more consistent.

Affordable apartment rents have increased by 7 percent; however, certain units in Bur Dubai and Deira have experienced decreases of 6.19 percent. Mid-range apartment rentals have seen annual hikes ranging from 1 percent to 6 percent. Interestingly, asking rents for luxury apartments have generally declined by 1 percent to 5 percent, although some units in Dubai Marina and Downtown Dubai have reported increases of up to 3 percent in annual rent.

In the villa market, affordable rentals have surged by up to 9 percent in prominent districts. Asking rents for mid-tier villas have generally risen by up to 7 percent, with exceptions for 3 and 4-bedroom units in Al Furjan, as well as 4 and 5-bedroom units in JVC, which have recorded rent decreases of up to 13 percent. Luxury villa rentals have skyrocketed by up to 53 percent, particularly with 5-bedroom units in Dubai Hills Estate seeing the highest price hikes following the influx of new inventory in Palm Hills, Golf Place Terraces, and Maple. Meanwhile, 4-bedroom luxury villas have reported decreases of 1 percent to 9 percent across the board. The ongoing demand and limited supply have kept villa rentals competitive for landlords.

Bur Dubai and Arjan have emerged as popular choices for affordable apartment rentals, while DAMAC Hills 2 and Mirdif have been preferred for villas. In the mid-tier segment, JVC and Business Bay have distinguished themselves for apartment rentals, with Al Furjan and JVC attracting significant interest from tenants seeking villa rentals. For luxury properties, Dubai Marina and Downtown Dubai continue to be prime options for apartments, while Dubai Hills Estate and DAMAC Hills are top picks for luxury villas.

dubai rental market

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Strong demand for monthly and daily rentals

Dubai’s short-term rental market continues to grow across all pricing segments, with strong demand for both monthly and daily rental formats, especially in lifestyle-centric, centrally located neighborhoods.

Top luxury areas for apartment rentals

Dubai Marina, Downtown Dubai, and Meydan City have emerged as the top three luxury areas for monthly apartment rentals, with average rents ranging from AED7,180 to AED16,310. In the villa segment, Palm Jumeirah and Dubai Hills Estate continue to be the most desirable addresses, highlighting ongoing interest in waterfront and upscale suburban living. Monthly rents for high-end villas in these locations range between AED93,330 and AED171,430.

In the mid-tier segment, Jumeirah Village Circle (JVC) leads the way for monthly apartment rentals, boasting an average rent of AED7,090. Business Bay and Al Barsha also remain popular, offering a mix of studio to 2-bedroom layouts starting from AED4,630.

For budget-conscious renters, International City, Bur Dubai, and Deira are attractive options, with monthly apartment rents varying from AED3,080 to AED12,990. DAMAC Hills 2 (Akoya By DAMAC) has also gained popularity for affordable villas, providing family-friendly units available for AED12,960 to AED15,750 per month, depending on the configuration.

Haider Ali Khan, CEO of Bayut and dubizzle, CEO of Dubizzle Group MENA and board member of the Dubai Chamber of Digital Economy, commented: “Dubai’s rental market is starting to stabilise after a period of rapid growth. With over 72,000 new units expected this year, the pressure on rents is slowly starting to ease offering more breathing room and better choices for tenants. And with the rent-versus-buy debate picking up, especially now that prices are levelling out, we’re seeing more people take a serious look at homeownership. The First-Time Home Buyer initiative launched by DLD is also nudging renters to consider making that leap, offering access to exclusive units and attractive financing. This is where agents, backed by tools like TruBroker™, play a key role in helping people explore their options and make confident, well-informed decisions.”

dubai rental market

Daily short-term rentals

Downtown Dubai, Jumeirah Beach Residence (JBR), and Dubai Marina continue to be the top choices for daily luxury apartment rentals, thanks to their premium locations and exclusive amenities. Average daily rents in these areas range from AED516 to AED762. In the villa segment, Palm Jumeirah leads with average daily rents reaching AED6,960, reflecting a 14.59 percent increase that underscores the sustained demand for waterfront living.

In the mid-tier market, Business Bay, Jumeirah Village Circle (JVC), and Al Barsha are the most sought-after areas, with average daily apartment rents ranging from AED384 to AED472. Notably, JVC experienced a 5.6 percent increase in rental rates, averaging AED415 per day.

For budget-friendly options, Bur Dubai, Deira, and Dubai Silicon Oasis (DSO) remain popular. Despite a 5.34 percent dip in rental rates, Bur Dubai is still a favored choice for budget-conscious renters. Deira and DSO closely follow, with average daily rents ranging between AED206 and AED269.

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