Could Dubai’s Property Market Finally Shift in Renters’ Favour? Here’s What You Need to Know
November 14, 2024
Team Renters
For Dubai tenants, the past few years have brought skyrocketing rents and a competitive housing market due to intense demand, especially after the pandemic. However, according to S&P Global, this trend may soon stabilize. Over the next 18 months, property prices and rental rates are expected to remain steady, with the potential to decline afterward. The reason? A significant number of new project launches post-pandemic have led to an anticipated housing supply boom in 2025-2026. With approximately 182,000 new residential units entering the market, this increase in supply is projected to ease price pressures across the city.
Table Of Contents
What’s the cause of high rents in Dubai?
Dubai’s booming real estate market is aided by a few key factors, including local and international investor demand, new visa reforms, and the city’s continued economic growth. In addition to this, Dubai’s rapid post-pandemic recovery and its allure as a top destination for expatriates have driven the demand for housing to new heights, especially in prime areas.
Limited inventory has given landlords the upper hand in many lease negotiations, leaving tenants with little room to negotiate. In this context, many tenants face increasing lease renewals and fewer affordable options, particularly in high-demand neighborhoods. These elements contribute to a strong foundation for the market despite regional geopolitical tensions.
According to S&P Global, Dubai’s rental returns have been competitive compared to European markets, with high value per square foot, making it attractive for investors. Population growth, projected at 3.5% through 2025-2026, also supports sustained demand. This demand has been fueled further by ambitious initiatives like the D33 agenda, which aims to attract more foreign direct investment to Dubai.
How This Impacts Renters and Buyers: Practical Considerations
For renters, this means potential opportunities on the horizon:
- Rents May Decline as Supply Increases: The influx of new units is expected to impact rental prices, especially in non-prime areas at first. Renters may find more affordable options in these areas and may gain more negotiating power as supply grows.
- Shift Towards Mid-Market Properties: While luxury properties have dominated in recent years, developers are projected to shift toward more affordable mid-market homes. This could open up more diverse options for renters and buyers alike, especially those seeking practical, budget-friendly housing.
- Timing is Key for Lease Renewals and Purchases: Renters and prospective buyers might benefit from staying informed on market trends. As delays in project delivery could momentarily maintain price pressure, monitoring the pace of new project launches can help renters time their lease renewals or purchases for optimal savings.
Conclusion
While the Dubai market has been challenging for renters, a wave of new developments may soon provide some relief. With increased housing supply on the way, renters and buyers can expect more choices and the possibility of stabilized, or even declining, rents in the coming years.
Prepare for Dubai’s shifting rental landscape by using Renters to manage rent payments easily and efficiently. With Renters, you can manage all aspects of rent payments online—from splitting costs with roommates to scheduling flexible payment plans. Download the app today at rentersapp.io and explore the smartest way to manage rent!