Dubai Real Estate Market: Rent Increases Set to Stabilize. The Impact of Rising Apartment Supply on the Rental Market.
Signs of Stabilization in Dubai's Rental Market
After years of continuous increases, Dubai's rental market is now showing signs of stabilization. An increase in the supply of new apartments has intensified competition among landlords, creating more options for renters (tenants). This article will explain the changes occurring in Dubai's rental market in an easy-to-understand manner for beginners.
Concrete Data on Market Stabilization
According to a report by real estate agency Betterhomes, the average annual rental price in Q3 2025 (July-September) saw a modest 4% increase compared to the previous year. More notably, there was a significant 15% drop compared to the immediately preceding quarter (April-June). This suggests that the rapid rent increases observed previously have subsided, and the market is gradually regaining its calm.
Why Have Rents Stabilized?
The most significant factor contributing to market stabilization is the increased supply of new properties.
Mass Supply of New Properties
According to a report by real estate advisory firm Colliers, approximately 8,100 apartments and 1,650 villas were completed and supplied to the market in Q3 2025 alone. Many new projects are also in the pipeline.
The main impacts of increased supply are as follows:
- Intensified Competition Among Landlords: To avoid vacancies, landlords are now compelled to offer attractive terms.
- Expanded Choices for Renters: Renters can more easily choose a property that fits their budget and preferences from a wider selection.
Impact of Changes in the Rental Market
These market changes are affecting both renters and landlords.
Benefits for Renters (Tenants)
Renters can now choose properties more carefully. The urgency to make quick decisions on contracts, as was common before, has diminished, and they have become more price-sensitive. With an increased number of property options, there is also more room for rent negotiation.
Landlord Responses
On the other hand, landlords have begun efforts to attract tenants. Specifically, there's a trend of upgrading and renovating properties to differentiate them from others. This could potentially lead to an overall improvement in the quality of properties across the market.
Summary
Against the backdrop of increased new apartment supply, Dubai's rental market is transitioning from a period of rapid rent increases to one of stabilization. As a result, the market is becoming more segmented and complex, varying by specific areas, buildings, and even room types. A more favorable situation is emerging for renters, while landlords are now required to adopt new strategies to secure tenants. It will be important to continue monitoring the future trends of Dubai's real estate market.
Reference Article: Dubai rent growth slows as supply narrows gap between renewals and new leases - Khaleej Times