As we passed January 2025, Dubai's dynamic rental market continues to evolve, presenting both opportunities and challenges for landlords and tenants alike.
Dubai's attractive living conditions, including tax-free income for individuals and a low corporate tax rate, consistently draw expatriates from around the world to establish new businesses or relocate their operational offices here. This demand drives the property sector, and the below analysis offers insights into the current state of the market and what we can anticipate in the months to come.
1. Overall performance of the market
For new leases contracts on apartments, villas, and commercial properties in Dubai the average price increase by 7% compared to same month last year and remained close from the previous month, at 75,000 AED
2. Breakdown of rents values by property types overall
Apartments 11.1% increase YoY
Villas and Townhouses 12.5% increase YoY
Commercial properties 56.4% increase YoY
Property rents performance on new contracts, for apartments overall in Dubai
Apartment rent values for new contracts, saw a 16% increase vs LY and 3% up from last month.
3. Popular Areas
Here is an overview on the property rents in Dubai main areas, along beach and city, for new contracts on apartments across various segments:
Beach main areas:
Following last year trend, the 1-bedroom apartments in Palm Jumeirah are renting for the same price as 2-bedroom apartments in Dubai Marina.
City main areas:
Downtown Dubai has seen another month of rising premiums for 2-bedroom apartments, being driven by new developments from EMAAR that have been recently handed over.
Mid-Tier Apartments in Jumeirah Village Circle (JVC) maintained its value at 70,000 AED annually for new contract prices for 1-bedroom apartments, which signifies a 7.7% year-over-year growth.
Affordable Apartments on new contracts: rental for 1-bedroom apartment in Sports City remained steady at 57,000 AED representing a 14% YoY increase.
4. Demand and Supply Dynamics
Latest data for Dubai shows that in 2024 the number of completed units was 27,541, which represents a -28% lower volume than prior year.
5. Trends in Rental preferences
The sustained population growth is a key support factor for the rental market. Tenants are becoming more discerning, seeking not just a place to live, but a lifestyle. Amenities, community facilities, and proximity to transportation and entertainment are becoming increasingly important factors in their decision-making process.
What to Expect in the Coming Months:
While demand remains healthy, we anticipate a period of moderate rental growth in 2025. The pace of increases may be slower compared to previous years, as affordability becomes a greater concern for tenants. At the same time, with new supply entering the market, landlords may face increased competition to attract and retain tenants.
Conclusion
Dubai's rental market in January 2025 presents a dynamic landscape with evolving trends. By understanding these trends and adapting to the changing environment, landlords and tenants can navigate the market successfully. Staying informed, prioritizing tenant satisfaction, and offering competitive rates will be crucial for success in the year ahead.
For more detailed insights, stay tuned for our next monthly report to keep updated of the latest market developments in Dubai.
Source: DXB Interact
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