Dubai: Rents increases slow down as more inventory comes online

Khaleej Times

12-03-2025

Rent increases have started to slow down in Dubai due to new inventory, giving tenants more options, says real estate industry executives.
'We're seeing increased rental inventory online, reinforcing the trend of rent stabilisation in some areas in 2025. Tenants in these sectors now have more options and are increasingly price-sensitive, while landlords who price competitively secure tenants more quickly,' said Rupert Simmonds, director of leasing at Betterhomes.
Since rents have surged in recent years, Simmonds believes that 'minor fluctuations are part of a healthy market cycle.'
The drop in rents follows Dubai recorded its first monthly price decline in over two years in January 2025, signalling a long-anticipated shift toward equilibrium.
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Property Monitor data revealed average prices falling by 0.57 per cent in January 2025 to Dh1,484 per square foot — the first drop since summer 2022. This cooling follows four consecutive years of unprecedented growth, during which prices surged by over 30 per cent in 2024 alone.
According to real estate consultancy and brokerage Asteco, the delivery of new supplies in 2024 was lower than anticipated, but projections for 2025 indicate a significant increase in inventory.
'Assuming the majority of this projected supply enters the market, a moderation, or even a reversal, of rental growth could be observed in specific communities and/or projects. Affordability factors are expected to fuel continued migration to the Northern Emirates in 2025, a trend that gathered pace in the second half of 2024,' it said.
Asteco projected that 63,900 apartments and villas will be delivered this year, compared to 33,625 in 2024.
Cavendish Maxwell, a real estate consultancy, earlier forecasted that 243,000 new units are in the pipeline for delivery by the end of 2027, with apartments accounting for 80 per cent of the future inventory. This will further ease pressure on prices and rentals in Dubai.
This will stabilise prices and rents and ease pressure on tenants.
Most of the future supply will come in Jumeirah Village Circle, where almost 25,000 units are set to be delivered between now and 2027, followed by Business Bay (16,000), Azizi Venice (13,500), Damac Lagoons (11,100) and Arjan (9,000).
Betterhomes data showed that the strongest rental growth was seen in apartments at Al Khail Heights, where rents increased by 6.6 per cent to an average of Dh66,900. Townhouses in Palm Jumeirah followed closely, with a 6.5 per cent rise to Dh127,300.