Dubai tenants can expect rents to stabilise with more homes on the way

Dubai: After two years of sharp rent increases, Dubai tenants can expect a calmer market ahead. The city’s rental boom is entering a more balanced phase, with steady, but slower, growth predicted through early 2026 as thousands of new homes are handed over across key communities.

According to Rui Liu, chairman and founder of LEOS Developments, the next six months will likely bring “steady growth, though at a more moderate pace than in 2023–2024.” He added that rental increases will mostly occur “in areas where handovers remain limited, such as established villa communities and centrally located apartment zones.”

The trend, Liu noted, will be uneven across property types. “We expect a soft stabilisation in rents in the mid- to upper-mid segments, while the luxury category will continue to see sustained demand due to the influx of high-income professionals and long-term visa holders.”

More families are also reshaping demand patterns. “Dubai is increasingly evolving into a family-focused destination, where residents prioritise space, privacy, and access to green, community-oriented environments over high-rise apartment living,” Liu said. That shift is driving a clear move toward villas and townhouses, away from smaller apartments, as residents seek long-term homes rather than temporary rentals.

Developers, too, are adapting. Liu expects the large wave of handovers in 2025 and 2026 to inject healthy competition, particularly in the apartment market. “While headline rents may not drop sharply, landlords of older or less well-maintained buildings will need to moderate rent increases to retain tenants,” he said. “In the long run, new supply will enhance market balance by offering more choice to tenants and sustaining Dubai’s appeal as a globally competitive residential destination.”

Recent data backs this up. According to DXBinteract, Dubai recorded more than 59,000 property sales in Q3 2025, worth Dh170.7 billion, a 20% year-on-year increase in value. Total sales for the first nine months of the year reached Dh498.8 billion, close to half a trillion dirhams.

Apartments dominated the activity, though villa sales saw higher price gains per square foot.

Analysts expect over 42,000 new homes to be delivered in 2025, the highest number since 2017, which is expected to ease pressure on the mid-market and improve tenant choice. Cushman & Wakefield forecasts that both rents and prices will rise by less than 10% this year, compared to the double-digit jumps seen in 2023 and 2024.

For renters, this means the next year could bring greater flexibility and fewer bidding wars. Prime villas and luxury apartments will remain in demand, but newer developments in areas like Dubailand, JVC and Dubai Sports City are expected to stabilise the market.

After a record-breaking run, the city’s maturing housing market is set to give tenants more breathing space and more options as supply finally catches up with demand.