Dubai rent spikes to ease as new tenants get more options — buyers eye flats in UAE

Dubai’s property market is showing signs of maturity after two years of record-breaking highs.

Both the ValuStrat Q3 2025 Real Estate Review and Betterhomes’ Shaping Skylines report point to a phase of steady, selective growth — one that’s increasingly beneficial for renters and measured for investors.

Rent growth steadies

After months of relentless rent hikes, rental prices are finally stabilizing.
ValuStrat data shows rents across Dubai rose just 2.1% in Q3, compared with 5.5% in Q2. Annual rent growth slowed to 14.8%, suggesting that supply is catching up with demand.

Apartment rents grew at a slower pace, while villas — particularly in high-demand areas like Arabian Ranches and Palm Jumeirah — saw marginal quarterly drops as more inventory hit the market.

Betterhomes reported a similar trend: leasing transactions surged 92% year-on-year, but rental prices remained largely stable. The average annual rent across Dubai now stands at Dh196,000, with apartments accounting for the majority of new leases.

For tenants, this easing offers long-awaited breathing space after years of soaring costs. “More supply is coming online, giving renters options again,” said a Dubai-based leasing manager. “We’re seeing landlords become more flexible with pricing and payment terms.”

Apartment boom

Apartment sales are dominating Dubai’s real estate landscape.

Betterhomes found that apartment transactions hit Dh93 billion in Q3, the highest ever recorded, with volumes climbing 22% and off-plan sales surging 35% quarter-on-quarter.

Off-plan properties now make up 70% of all transactions, reflecting developer confidence and strong investor appetite.

ValuStrat’s analysis backs this up: mid-tier apartment communities like Jumeirah Village Circle, Business Bay, and Arjan are leading sales growth, buoyed by new launches and improved affordability following the US rate cut.

Villa market cools

After two years of exceptional growth, villa and townhouse sales dipped 30% in Q3, a natural recalibration after a strong first half.

Prices in prime communities like Emirates Hills and Dubai Hills Estate are holding firm, though buyers are becoming more selective. “Villas aren’t falling out of favour,” said Betterhomes CEO Louis Harding. “It’s a moment of pause, not panic.”

Prices and outlook

Average residential prices hit a record Dh1,664 per sq ft, almost double 2020 levels, according to Betterhomes.

ValuStrat’s index also showed a yearly price increase of 21.6%, though quarterly growth is moderating as more than 28,500 new units were delivered this year — 85% of them apartments.

With another 200,000 homes expected by 2027, analysts expect a more balanced market ahead. For UAE residents, the message is clear: renters finally have leverage, while long-term investors still see Dubai as a stable, high-yield market.