Dubai property: Are rent increases slowing down in affordable locations?

Dubai: Residents in Dubai’s Discovery Gardens and Sports City could be seeing rent increases start to slow down, according to new data, and which could extend to other mid-market and affordable locations in the city.

In the first three months of 2025, rent increases at both Discovery Gardens and Sports City gained a marginal 1% on average compared to Q4-2024, as per the latest update on the Dubai real estate scene from Asteco.

So, a 1-bedroom apartment at Discovery Gardens would range Dh50,000-Dh80,000, and a similar one in Sports City would be Dh40,000 to Dh85,000. (Sports City has seen multiple new apartment buildings completed and residents move in. These apartments should command a higher rental compared to the location average, leasing agents say.)

Dubai Sports City remains a major draw with tenants looking out for budget-friendly choices, especially newer residents to Dubai. (The other contender is Motor City, where listings show 1-bedroom rents at or over the Dh80,000 mark.)

If the quarter-on-quarter rental rates show such stability in locations such as Discovery Gardens and Sports City, that would be just the relief tenants, especially new ones, would want to sign up to.

Rents in Deira too are stable – or even showing some marginal decline, according to Asteco. Right now, the average for a 1-bedroom in one of the city’s most sought after locations is Dh37,500-Dh90,000. According to a leasing agent, “A lot of the older buildings in Deira actually saw rent declines after the new Dubai ‘smart’ Rental Index was introduced from January 2025.

“But fairly newer buildings in Deira, especially those at or near the Deira Reclamation Project (also called Deira Enrichment Project) command fairly high rents. They have also been helped by closeness to the Dubai Gold Souk Extension, which has been the case for two years now.”

Now, in recent weeks, there has been much talk about how Dubai's rent increases of the last 3 years are showing signs of slowing down. But these are mostly happening at individual buildings rather than across areas.

But by June, the slowing rental trends could become more widespread, say property market sources.

At International City, the Asteco report finds that between Q4-24 and end of Q1-25, rents actually dipped by3%. (A 1-bedroom there is listing at between Dh35,000-Dh65,000.)

"The Smart Rental Index is proving instrumental in promoting rental price stability," says the findings. "By effectively guiding rental adjustments, the index is playing a crucial role in promoting a more predictable cost of living.

"Whilst the index provides a framework allowing for rent adjustments upon lease renewal - potentially including larger increases subject to market conditions - transactional activity for premium rentals appears to be cooling, particularly for non-upgraded properties."

Industry sources will be in wide agreement with that sentiment. They add that end June or early July will be the ideal timeline to judge the impact of the new Rental Index.