Rents in Dubai are expected to keep rising, but at a slower rate, as the market begins to show signs of stability, with more rental listings remaining unchanged in the second quarter of this year.
Data indicates that a larger proportion of Dubai residents renewed their tenancy agreements during the second quarter, even as rents hit record levels in the emirate.
Taimur Khan, head of research at CBRE, stated, “In both the sales and rental markets, we anticipate continued rate increases. However, this will not occur at the same pace, particularly as the market shows signs of stabilization.”
In the first half of 2024, Khan noted that 88.1% of sales listings and 73.8% of rental listings maintained their rates, compared to 79.6% and 72.9% during the same period the previous year.
Khan added that the performance of Dubai’s residential market is expected to remain strong in the near future, as rentals and prices continue to rise in 2024, particularly in the prime sector, due to an influx of high-net-worth individuals.
This trend has also driven transactions to record levels in the emirate.
“The growth rate for rents remained consistent, with average residential rents increasing by 21.1% year-on-year to June 2024. This was fueled by a 22.2% rise in average apartment rents and a 12.7% rise in average villa rents. By June 2024, average rents for apartments and villas were Dh127,969 and Dh354,512 per annum, respectively,” Khan explained.
For the January-June 2024 period, the highest annual rents for apartments and villas were recorded in Palm Jumeirah, with averages of Dh279,826, and in Al Barari, where rents reached Dh1,344,844.
According to the Dubai Land Department, 299,564 rental contracts were registered in the first half of the year, marking a 52.5% increase from 2019 and a 5.8% rise from the same period in 2023.
“This year-on-year increase is largely due to an 11.9% rise in renewed contracts, while new registrations declined by 3.7%. Tenants are increasingly opting to renew their existing leases rather than move to new units, which would likely come with much higher costs,” Khan said.
