Dubai: Landlords offering short-stay rentals in Dubai this Eid have more than one reason to feel good about how their fortunes are shaping up.
While lease rates are higher by up to 30 per cent on average, what would please them just as much is these properties are being rented for a week or even more rather than 2-4 day average of the past. What this does is cut even further the number of days the property remains vacant. And it all adds up for the landlords.
The rise in short-stay rentals ahead and during Eid was always going to happen. What’s surprising is that rates have risen sharply even with more properties being listed for short-stay options. Despite landlords feeling the pull from the 12-month leasing market, where rents are still increasing by 15-25 per cent year-on-year.
“The average stay during this high season has been between 6-8 nights - and this is across all locations in Dubai,” said Anna Skigin at the property management firm Frank Porter. “For comparison, a one-bedroom property in Dubai Marina currently is around Dh565 per night, while you can get one in Sports City for Dh280.
“That's a big difference for a small family. These mid-market options are great as they attract more and more people to Dubai, who spend money (elsewhere) on other services such as restaurants and activities. It's a win-win.”
Of course, not everyone can afford a villa on the Palm for a short-stay. There are many mid-market options available in all areas such as Dubai Marina, JBR, Downtown, Business Bay, JLT, JVC/JVT, Barsha South, Sports City, Production City, Festival City, Dubai Creek, Barsha Heights, Silicon Oasis, etc
Dubai for all
That indeed is quite a change from the way landlords/property management companies have treated the short-stay market. Because Dubai’s short-stay market also has listings where a four-bedroom penthouse at the Downtown lists at Dh10,000 a night.
The emphasis has been on offering homes packed with luxury trappings, whether a beachside property on the Palm, a penthouse in Downtown or Dubai Marina with all the views of a sprawling city and attractions nearby.
There is still room for rates during Eid to rise further. “We are seeing occupancies rise by 30 per cent from the average during Ramadan for the Eid weekend,” said Vinayak Mahtani, CEO of bnbme, which specialises in holiday homes. “And expect close rates to go up to 50 per cent and be fully booked during Eid.
“We expect a lot of local expats too to stay with us considering how expensive it is currently to travel outside of the UAE. When you opt for a staycation you become a tourist to Dubai and do the touristy stuff.”
Occupancies are rising from the Ramadan average by 30% for the Eid weekend and around that time rates should go up to 50% - and be fully booked
Listings are up
The number of short-stay listings too have shot up, even with all the attractions the longer term rental market offers landlords. Estimates suggest there are around 20,000 listings for short-stays in Dubai. “For comparison, Paris has 27,000 listings - and is a much more mature market,” said Anna. “Dubai is catching up quickly. We have seen a lot of new buyers in the market, purchasing real estate specifically to rent it out short-term.”
The rent-on-demand platform Airbnb’s decision last year to add Dubai to the ‘Live and Work Anywhere’ program is the other big factor at work for more properties becoming available for short-stays. “Dubai on the map as the destination for remote working professionals,” said Anna. “Since 2021, the UAE has been issuing 1-year 'digital nomad' visas. However, not many people were aware that this is possible.
“With the Airbnb and Dubai Department of Economy and Tourism collaboration and the marketing that will come from it, we expect even more interest for these longer term (short-)stays.”
We are already seeing an influx of bookings for December specifically, which comes much earlier than in the previous two years. This shows tourists to Dubai are already thinking ahead to the next peak season
Thinking beyond holidays
The short-stay market was always more than just renting to visitors who wanted to think outside of a hotel for their holidays. Even then, the average length of lease on short-stays are on the rise, which indicates more business travellers in the mix. Plus, a rising base of ‘digital nomads’, who stay and work from here wherever their ‘office’ might be.
“Through Airbnb, we are noticing longer stays (averaging 23 days) and on renewals, which suggests that the bookings aren't just for a holiday rental,” said Joanna Plunkett, Manager at Betterstay.
This works for property owners turned landlords. Fun and return on investments are dictating what property owners are doing with their units. “With Dubai's investor visa becoming a huge factor, buyers are looking to keep their investment available for them to use and enjoy whenever they feel like it,” said Joanna. “A luxury that is only possible with short-term rentals.”