CAN WE EXPECT EASE IN RENTAL PRICES OF DUBAI PROPERTIES?

  • Primo Capital
  • July 5 2024

As the real estate market of Dubai is growing it is becoming the synonym of innovation and extravagant living. One of the primary elements of this comfortable life is the home which if offered at affordable prices is the best opportunity. However, currently, the promoting question is that amid high rental prices, is there any chance of ease? This is because some relief is expected in the rental prices of Dubai properties with the increased supply of properties. In this blog, this will remain the focus on whether to not renters will get the breath of peace.

Dubai Rental Market is shifting.

According to the data from the Dubai Land Department, the rental registration number touched the mark of a total of 255,178 as of May 2024. This leads to a 5.9% increase in the annual percentage of rental bookings, as mentioned by a reputable real estate source.  On the other hand, the number of new contract registrations declined by 3.7%.

Another aspect which remains highly evident in the context of Dubai rental market buying is the shift of preference. Tenants are now focusing more on renewing the rental contract as the rent prices continue to surge. Now, let’s discuss some of the major factors that are determining the rental prices.

Factors Determining the Rental Prices of Dubai Properties

Dubai-economy-surging

Exploring the different factors that determine the rental prices will facilitate understanding the Dubai rental real estate landscape. This will also contribute to understanding the chances of ease in Rental prices of Dubai Properties.  Below are the three major factors that drive the rental market in Dubai.

Economic Growth – Boon or Bane

The resurgence in Dubai's economy remains a sign of prosperity overall, but it has also resulted in fuelling the rental demand.  Due to this growth, the job opportunities are appealing to buyers who are looking for suitable housing.

The Influx of Expats – Rental Supply and Demand is changing.

Another factor that remains determinant in easing or un-easing the rent of the property in Dubai is the influx of expats.  According to the insights from Dubai Land Department data the number of rental contracts was 58.71% as of 2022. Further, with the waves of newcomers in the bustling metropolis the tension in rental housing surged.

Aftereffects of Expo 2020 – Impact on the Rental Market

The phenomenal completion of Expo 2020 boosted the rental demand, especially in the nearby neighbourhoods. Although time has passed Rents in properties in Dubai skyrocketed significantly.  Moreover, the upcoming GITEX global expo in Dubai is also projecting similar impacts are increase in rental prices.

 

What’s Coming – A Glimpse into the Future

Rents-in-properties-in-Dubai-increasing

Industry Forecast

According to a credible source of real estate, it is forecasted that despite the spike in rental price hikes, the increase will be slower in 2024. Demand for rental homes is the major driver behind this increase.

Another portal of real estate recorded a slight decrease in the rents of the apartment price index and rent value. As the rent rate from AED 103 in December 2022 declined to AED 101. These forecasts suggest a slight ease in rent in Dubai homes for sale.

Rental Trends in Dubai Properties

To understand the rental trends let’s analyse the average rents of homes in different areas of Dubai in 2024 and 2023.

Area

Apartment Type

Average Rent 2023 (AED)

Average Rent 2024 (AED)

Change

Dubai Marina

Studio

116,000

128,000

+10.3% (Estimated)

Downtown Dubai

Studio

95,000

102,000

+7.4% (Estimated)

Palm Jumeirah

Studio

130,000

140,000

+7.7% (Estimated)

Jumeirah Village Circle

Studio

55,000

60,000

+9.1% (Estimated)

Dubai Marina

1 Bedroom

140,000

152,000

+8.6% (Estimated)

Downtown Dubai

1 Bedroom

125,000

135,000

+8.0% (Estimated)

Palm Jumeirah

1 Bedroom

160,000

170,000

+6.3% (Estimated)

 

From the analysis of the above table, it can be easily interpreted that expecting ease in rent for Dubai properties in almost every area is difficult.

Tips for Renters living in Dubai Properties

Rental-properties-in Dubai

Now, if the rent is increased what as a renter you do to select the best property for you? Below are the two ways you can opt for.

  • Negotiation

If the Properties in Dubai rental prices are increasing one of the options is to learn negotiation.  This will help you to select a deal for you. Research average rental prices and then negotiate to make a long-term beneficial commitment.

  • Exploring the Options on Table

Additionally, through comprehensive research and patience, you can explore the existing options including co-living spaces, or shared accommodation.

Conclusion

On this note, it is easy to say that it is not perfect for you as a renter to expect ease in the rental prices of Dubai properties. Moreover, no one factor is determining this ease in rent. The strong presence of expats from around the globe, the flourishing economy, and major events are contributing to this surge in rental prices. However, based on industry forecasts the maximum you can expect is a rent increase but with a slow pace.



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