Dubai Rental Market 2025: Trends & Insights

•  In early 2025, rental growth began to ease as new supply entered the market. With approximately 9,300 new homes delivered in Q1, overall rent increases slowed dramatically into single-digit territory for many segments.
•  According to Global Property Guide, annual rental growth dropped to 8.5% in May 2025, down from 14.3% in January and a staggering 21.1% the prior year.

•  Gulf News reports tenants are now seeing more choice and flexibility, especially with over 72,000 new homes expected in 2025, which eases pressure on rental prices.

•  Experts predicted a 18% rise in short-term rentals and 13% rise in long-term rentals for 2025.
•  These figures align closely with early 2025 performance data, driven in part by continuing demand from tourists and an influx of expats.

•  2024 saw supply lag behind demand, leading to sharp rental increases. Only 27,000 units were completed that year, setting the stage for tight rental markets.
•  The introduction of the Smart Rental Index and improved transparency is helping stabilize prices as tenants gain better data.
•  Yet, with Dubai’s population surging and rent climbing by 16% over a year, affordability issues remain, especially with stagnant salary growth.

•  Top areas for rentals remain in high demand:

o Dubai Marina: Popular among expats and professionals.

o Downtown Dubai: Iconic location with premium lifestyle appeal

•  Additional trending insights:

o Flexible luxury, eco-friendly stays, and smart-tech-equipped rentals are gaining ground, especially in short-term markets

•  More Options for Tenants: With supply catching up, renters have increased bargaining power and alternatives.
•  Transitional Market: Rental growth is tempering, signaling a shift from boom to balance.
•  Strategic Insight for Investors: Understanding which segments are cooling or thriving helps guide rental investment decisions.