Dubai home rents, prices fall this summer - even for studios, 1-bedroom apartments

Dubai: In the last two months, more locations in Dubai are seeing rents drop – even in the more affordable residential communities in the city.

This is the case even for rents on studios and 1-bedroom apartments after the crackdown on sub-letting and portioning by Dubai authorities and landlords.

At International City, which has been a popular spot for sub-letting options, rents have remained flat for the last two months.

That means 1-bedroom units are currently asking for Dh48,000-Dh55,000 on average, based on listings shown on Bayut. Studios at International City are showing Dh28,000-Dh29,000, but there are options being rented out for lower, say leasing agents.

At Discovery Gardens, studios command between Dh48,000-Dh60,000, and 1-bedrooms have asking rents of Dh50,000-Dh105,000. Rents at one of Dubai’s most popular mid-market residential locations have seen a decline by 1% in the last 2 months.   

“The crackdown on partitioning and sub-letting in Dubai still hasn’t shown up in the real estate data – so far,” said Eima Hajimalan, Manager at GCP Properties.

“Even if there is increased demand for studios and 1-bed units, rents will still be dictated by that building’s star rating in the Dubai Rental Index. There is nothing to suggest that rents on these property types are increasing.

“In fact, right through the last two months, rents are dropping at more locations in Dubai – with Palm Jumeirah villas being the exception.”

It could also be that many of those affected by having to find new rental options following the crackdown are seeking properties in Sharjah or other emirates.

According to property market sources, both property prices and rents in Dubai are slowly coming off their 2024 or Q1-25 highs. When it comes to property prices, even where offplan launch prices are high, developers are offering ‘discounts’ and fee waivers as well as easy payment plans.

But it is on rental rates that there are more indications of stability or a cooling off.

 “Looking at the last 3 months, rents on studios & one bedrooms have stabilized, we don’t see too much of an increase on new contracts,” said Aakarshan Kathuria, CEO of RiseUp, a property agency.  

“Yes, there is a hike on renewals still compared to last year’s rentals. But on new contracts, we are seeing the rents being on a straight line over the last 3 months.”

The tightening up on sub-letting - which has been happening over recent weeks - will create new demand for affordable choices. That's for sure.

But 'It's unlikely that all those tenants who have to move out because of the crackdown all decide to try and rent a new property in the same place," said a leasing agent.

"There just aren't enough vacant options available. So, this demand will be spread over the city, and many could re-locate to locations such as Deira, Al Nahda, Al Quoz, and Jebel Ali as well as in Sharjah."