Dubai rents rose by almost 10% in the first half of the year, and experts predict that the city's housing market would see another 10% increase in the second half.
Dubai Rental Market
In the first half of 2024, rental prices in Dubai surged by approximately 10 percent, and industry experts predict a similar increase in the latter half of the year. This upward trend follows a post-pandemic recovery marked by population growth, an influx of high-net-worth individuals, and economic expansion, which has generated new job opportunities.
Jacob Bramley, senior leasing manager at Betterhomes, noted the initial 10 percent rise and anticipates sustained growth of 5–10 percent for the rest of 2024. He highlighted upcoming property handovers in the third and fourth quarters as contributing factors to maintaining supply and supporting rental market stability.
Looking ahead, Paul Kelly, operations director at Allsopp and Allsopp, projected a shift towards more gradual rental growth in the second half of 2024 and into 2025. He emphasized the significance of increased property supply, with over 10,000 units expected in Q2 alone, to accommodate Dubai's expanding population. Kelly also referenced a report indicating the arrival of over 6,700 millionaires, further stimulating demand in both the residential and real estate sectors.
Performance in the first half of 2024 demonstrated substantial rental increases across Dubai. Kelly reported an average rental rise of 15.7 percent compared to the same period in 2023, with apartments and townhouses increasing just under 15 percent and villas experiencing an average rise of 18 percent. These figures reflect adjustments made under the updated RERA Index, which aligned previously undervalued units closer to market rates, thus contributing to overall rental hikes.
Market Dynamics and Tenant Adjustments
Areas such as Jumeirah Beach Residence (JBR), Town Square, Dubai Production City, Dubai Healthcare City 2, and Meydan recorded the highest rental increases of 21 to 22 percent in the first half of 2024, according to data from Allsopp & Allsopp. Dubai South notably saw a 38 percent average rent increase compared to H1 last year, buoyed by anticipated demand following the announcement of the new Al Maktoum Airport earlier in the year.
As Dubai's rental market continues to evolve, landlords are increasingly offering flexible payment options, such as multiple checks, to accommodate tenants amidst rising rental costs. These adjustments reflect ongoing efforts to balance market dynamics and ensure sustainable growth in the city's real estate sector.
