After a substantial 21.1% increase in rents in 2024, Dubai's rental market may see a slowdown as more properties become available. Renewals have increased by 12.2%, indicating tenant preference for stable pricing. New registrations have slightly dipped by 3.7%, reflecting constrained supply. Despite continued high rents in prime locations like Palm Jumeirah and Al Barari, where averages reach AED 272,867 and AED 1,391,242 annually, respectively, more affordable areas could see easing rental pressures. With new developments entering the market, experts anticipate a shift towards single-digit rent increases, offering potential relief to tenants amidst Dubai's evolving rental landscape.
Renting an apartment in Dubai might become slightly more affordable in the coming months. While rents have been rising steadily in 2024, experts predict a slowdown as more rental properties become available. This is good news for tenants who have seen rents surge by an average of 21.1% so far this year.
The high cost of rent is pushing some tenants to renew their existing leases rather than risk even higher prices elsewhere. Data from the Dubai Land Department shows that renewals are up 12.2% year-on-year, with a total of 255,178 rental registrations recorded in the year to date to May 2024. However, new rental registrations have dipped slightly by 3.7%.
The increase in rents is partly due to strong demand, but a lack of available apartments has also been a factor. This is expected to change as new developments come online, providing renters with more options and potentially leading to some price stabilization.
Even with a projected slowdown, prime locations like Palm Jumeirah and Al Barari will likely continue to see high rents. Apartments in Palm Jumeirah currently average a staggering AED 272,867 per year, while villas in Al Barari go for an average of AED 1,391,242 annually.
The good news is that the rental squeeze is expected to ease in more affordable areas. As some renters priced out of prime locations look for alternatives, secondary communities are experiencing a rise in rents, but this growth is anticipated to be more moderate.
Overall, the outlook for Dubai's rental market suggests a shift towards single-digit rent increases in the near future. While some areas may still see steeper rises, the increasing supply of rental properties (potentially exceeding new registrations) should bring some much-needed relief to tenants in Dubai. CBRE expects rental rates to continue to increase but not at the same pace, with the market heading towards a more balanced state.
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