Dubai real estate is witnessing a stabilization in rental costs as new real estate projects come into operation, providing tenants with more options, while prime areas such as Palm Jumeirah and Al Barari are witnessing continued rise in rents, supported by strong demand.
Property news website PropNewsTime said that apartment rents in Dubai are expected to stabilize in the coming months of this year, after a steady rise throughout 2024. The website indicated that tenants, who have seen a significant increase in rents at an average rate of 21.1% so far this year, will be prompted by these increases to renew their current contracts rather than risk higher prices elsewhere. The website cited data from the Dubai Land Department, which showed that renewals rose 12.2% year-on-year, with a total of 255,178 leases registered until May 2024.
The site attributes the rise in rents in part to strong demand.
The average rent for apartments in Palm Jumeirah currently stands at AED 272,867 per annum, while villas in Al Barari average AED 1,391,242 per annum.
The site expects pressure on rents to ease in the prime areas with reasonable prices, while secondary areas will see rent increases, but this growth is expected to be more moderate. The site concludes its report by saying: “Overall, Dubai’s rental market forecasts indicate a shift towards single-digit rent increases in the near future.” CBRE expects rents to continue to rise, but not at the same pace, as the market moves towards a more balanced state.