After our recent analysis of last month's sales transaction trends, this post will offer an overview of the city's rental market trends.
Dubai's appealing living standards, such as tax-free earnings for individuals or low corporate tax rate, consistently attract expatriates globally to setup new entities or move their operational offices. This ongoing arrival of new residents drives the demand for rental properties, both short-term and long-term, particularly in well-developed area.
1. Overall performance of the market

The overall average price on new leases on apartments, villas, and commercial properties in Dubai remained steady from the previous month, at 74,000 AED.
2. Breakdown of rents values by property types for new contracts

Apartments 17.6% increase YoY

Villas and Townhouses 9.4% increase YoY

Commercial properties -25.1% increase YoY
Property rents performance for apartments overall in Dubai

Apartment rent values for new contracts saw a modest -1% correction vs Nov-24, still elevated by 12% since January, with a 17.6% year-over-year increase.
3. Popular Areas
Here is an overview on the main areas for new contracts for apartments across various segments:
Beach main areas:

Same trend as observed in Nov, the 1-bedroom apartments in Palm Jumeirah are renting for about the same price as 2-bedroom apartments in Dubai Marina. Meanwhile, 2-bedroom apartments in Palm Jumeirah experienced a slight decrease in Dec to 200k AED compared to the previous month.
City main areas:

The downtown area has experienced another month of increased premiums for 2-bedroom apartments, maintaining the highest level this year.
Mid-Tier Apartments in Jumeirah Village Circle (JVC) maintained its value at 70,000 AED annually for new contract prices for 1-bedroom apartments, which signifies a 16.7% year-over-year growth.
Affordable Apartments on new contracts: rental for 1-bedroom apartments in Sports City slightly increased to 58,000 AED after 4 months of flat 55,000 AED
Villa Rentals on new contracts:
Affordable Villas: Dubai South average yearly rents for 4-bedroom villas was at 145,000 AED in December representing a slight correction of -3.3% month-on-month.
Mid-Tier Villas: DAMAC Hills (Al Hebiah Third) 4-bedroom villas rental prices were recorded for 245,000 AED per year representing -17.5 % decrease compared to previous month.
Luxury Villas: Palm Jumeirah area, 4-bedroom villas rents were sitting at 950k AED, for new contracts recorded in December as it remains one of the top choices for luxury villa rentals in Dubai
4. Demand and Supply Dynamics
Year to date the data shows 28,315 completed units and 42k units are expected to come into the market this year.
5. Trends in Rental preferences
Tenants are aware of rising rental costs and plan ahead. It is advisable to explore various neighborhoods and property types to find the best fit for their budget and lifestyle.
Conclusion
Continuous new project launches coupled with new property developments and the introduction of new regulations such as the Dubai's new Smart Rental Index 2025, to streamline the market, drives the expansion of the rental market. The flexible lease terms and payment options introduced last year by certain Startup companies accommodates a diverse group of tenants, including both short-term visitors and long-term residents.
For more detailed insights, stay tuned for our next monthly report to keep updated of the latest market developments in Dubai.
Source: DXB Interact
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