Even as Dubai Marina and Downtown feel the full weight of sustained demand, other areas too are latching onto rental gains. Image Credit: GN Archive

Dubai: Rents in Dubai’s non-freehold residential districts such as Bur Dubai and Karama have started to rise sharply as demand spills over from the city’s popular freehold locations. The demand is such that even older buildings in these areas have seen landlords raise their rental demands - and getting tenants on those terms.

Until now, older properties were lagging by some distance when it came to how much landlords could hike their asking rates. That gap has by the close of the year narrowed significantly. There are clear reasons as to why this is happening.

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“Older buildings have increased prices, mainly because they generally have larger apartments than newer ones,” said Avinash Uttamchandani, Sales Manager of Rocky Real Estate, who adds that the the rental market in Dubai is facing a situation where there is heightened demand but not enough of the supply to accommodate that.

This is why areas such as Bur Dubai, Karama, Mankhool and Satwa have recorded, rent gains of a ‘minimum of 5-10 per cent’.

Although rent gains are across the board in these neighbourhoods, Uttamchandani said, "It is more so for three-bedroom apartments and premium buildings, where we have seen increases over 20 per cent in some cases as tenants are looking for larger apartments."

Spillover effect

It can’t be any other way going by the rental action in Dubai Marina or Downtown Dubai, for instance.

In Dubai Marina, compared to earlier annual rental contracts, there are now increases of not less than 20 per cent compared with last quarter, and in some cases by over 30 per cent, according to Mauro Marchetti, Client Advisor for Dubai Marina at Powerhouse Real Estate.

“There is no distinction between 1-, 2- or 3-bedroom properties,” said Marchetti, which has see one one-bedroom apartment leasing at around Dh100,000, a two-bedroom for Dh150,000 and a three-bed at around Dh220,000 on average.

Not enough villas

One detail has been constant in Dubai’s rental market in these two years - there is no dip in demand for villas or townhouses, even as more of these homes get delivered at the Palm, Dubai Hills, MBR City and Meydan. (It has also led to rental deals of Dh1 million and over for some of the villas at the most prominent spots on the Palm.)

Adding to rental pressures "The lack of villa and townhouse stock has started to add pressure on apartment rentals as good quality apartments with the right amenities are renting out faster,” said Gaurav Aidasani, founder and Managing Director, Union Square House Real Estate Broker. “Lack of supply in the near future will lead to this trend continuing in 2023.”

Rental trends at some of Dubai’s happening locations:

Business Bay

The high-rise cluster recorded 'one of the highest increases in rental rates’ in 2022. Most of the new rental contracts could command a much higher rate, which then added pressure on existing contracts.

Downtown Dubai

The Downtown had the highest rental rate increase in the past year, with three-bedroom units signing off on a whopping 25 per cent rise.


One-bedroom units have seen sizeable rent increases this year.


As at the Greens, JLT has recorded the highest rental gains for its one-bedroom units, with demand sparked by the connectivity offered through the two metro stations.


One of Dubai's mid-market neighbourhoods, the rental growth has been driven primarily by renewals.

Motor City

Until lately, this community has had the lowest increase in rental rates.

Dubai's non-freehold areas

Rents in Dubai's popular rental neighbourhoods in Bur Dubai, Karama and Mankhool have one-bedroom units between Dh35,000-Dh50,000 in Q2-2022 and rising to Dh40,000-Dh65,000 in Q4-2022.

Two-bedroom apartments were Dh45,000-Dh65,000 in Q2-22 and rose to Dh50,000-Dh80,000 in the fourth quarter, while three-bedrooms were averaging Dh60,000-Dh95,000 in Q2 and are now at Dh75,000-Dh135,000.

LIV Developers
Offplan launches vie for investor spotlight New high-visibility projects are showing up again in Dubai’s pre-eminent freehold locations. The Palm Jumeirah has got the likes of Omniyat Properties and Alpago in active mode; MBR City has got Sobha Realty line up more towers; Damac’s going steady with new projects; and Azizi is soon expected to unveil its most ambitious venture yet.

At Dubai Marina, LIV Developers has just launched a G+47-storey tower on a site across from the Le Royal Meridien and Ritz Carlton hotels. The ‘LIV Lux’ will be topped up by a penthouse that’s being listed for Dh75 million.

This is the developer’s third project at Dubai Marina.

The price point for LIV Lux is from Dh2,500 per square feet and up. In general, we are seeing that new construction is high in demand and buyers are demanding water-view apartments, which are achieving a premium above older construction. Sales for LIV Lux has already started.

- Ishan Khwaja, Director of LIV Developers