Dubai rents: Rates in Discovery Gardens, Deira see stability - less so in JVC

Dubai: Certain locations in Dubai are reinforcing their status as offering more pocket-friendly rental options, with Discovery Gardens and Sports City actually seeing asking rates actually stabilize. If residents expanded their choice to non-freehold locations, then asking rents for apartments in Deira too are seeing some sort of leveling off.

These tenants could also be getting some help from Dubai’s introduction of a star rating system to decide how much landlords can raise rents by. Each building has been assigned a specific star rating – from 1-5 – as per the newly introduced digital Rental Index in Dubai.

“Owners of some of the less well-managed buildings had a wakeup call after the star rating went into effect,” said an estate agent at a firm handling residential buildings in both freehold and non-freehold areas. “This is probably why tenants in some areas and buildings in Dubai’s more affordable areas may not see too high a rent increase this year.

“Landlords will have to go through specific processes to upgrade their properties and get a better rating. That takes time.”

What this means for a tenant – whether a new one or someone seeking a renewal – is less chance of seeing a sudden sharp increase on what they have to pay.

How are rents looking like in affordable areas?

A one-bedroom apartment in Discovery Gardens would command an annual rent of around Dh60,000, according to a new report from the property services firm Asteco. The average rental last year would be Dh52,500, while average in 2022 was Dh42,500. (Tenants feedback suggests that rent hikes in Discovery Gardens would be in the 5% range.)

At Dubai Sports City, the increase in 2024 for a one-bed unit was Dh55,000, a marginal gain on the Dh52,500 average in 2022.

“Whilst the delivery of new supply in 2024 was lower than anticipated, projections for 2025 indicate a significant increase in inventory,” says the Asteco report. “Assuming the majority of this projected supply enters the market, a moderation, or even a reversal, of rental growth could be observed in specific communities and/or projects.”

According to estate agents, it’s not just new buildings and more apartments that could help slow down rental growth in Dubai in certain locations. The new Rental Index and the star rating create a new dynamic that landlords need to adhere to – or at least gives tenants a reason to argue their case.

A one-bedroom apartment in the Deira district would be about Dh50,000 a year, while that for a two-bed, the average asking rate would be Dh75,000, says the Asteco report. Compared to 2023 rentals for the area, these are only higher by about Dh2,000-Dh2,500. (The average rental for new or relatively new apartment buildings in Deira would be higher.)

“The trend is for a majority of tenants to renew their leases, which is one reason why there aren’t that many new rental listings in Deira proper,” said a leasing agent. “But go further down, in areas such as Al Nahda and Al Ghusais, there are far more rental options – but at higher rents. They also come with the possibility of more rental increases in the next year or two.”

During 2021-22, the Jumeirah Village Circle cluster was a natural attraction for those seeking mid-tier rentals. But in the last two years, JVC rents have seen some of the sharpest rises – from Dh40,000 for a one-bedroom unit in 2021 to Dh65,000 at the end of 2024.

“Given that most of these properties are new and with a high degree or upkeep, tenants can expect higher asking rates from their landlords,” said an agent. “At the end of the day, it’s all about the star rating…”