Property Rents in Dubai: May 2025 Market Analysis

Dubai’s residential property rents market exhibited nuanced shifts in May 2025, balancing localized corrections with sustained demand in premium segments.

Leveraging transactional data through May 2025, this analysis focuses on apartment rents across key districts, offering critical insights for investors, tenants, and stakeholders navigating the emirate’s dynamic real estate landscape.

1. Overall market performance

Stabilization Amid Supply Growth

The apartment segment recorded an average value of 80,000 AED in May 2025, reflecting a -1.23% month-over-month (MoM) decline from April 2025 (81,000 AED) and 7% year-over-year (YoY) increase compared to May 2024 (75,000 AED). This divergence highlights a market transitioning from rapid post-pandemic growth to moderated appreciation, driven by future planned supply of 48,000+ new units scheduled for 2025.

The MoM contraction signaling tenant resistance to sustained price hikes. However, the YoY performance underscores Dubai’s enduring appeal, with population growth averaging 1,200 new residents weekly in Q1 2025

2. Breakdown of property rents values by types, overall

Apartments 6.7% increase YoY

Villas and Townhouses 15.2% increase YoY

Commercial properties -80% decrease YoY

3. Apartment Rental Area and Unit-Type Analysis

Beach main areas:

Dubai Marina and Plam Jumeirah

On the Palm, studio units: surged 8.33% MoM to 97,500 AED (May 2025), reversing April’s -3.33% dip, as high-net-worth tenants absorbed new luxury inventory.

In Dubai Marina, Studio Units: rents plummeted -16.13% MoM to 67,100 AED (May 2025) from 80,000 AED (April 2025), the sharpest correction since 2023. Two-Bedroom units: edged up 1.05% MoM to 145,000 AED, benefiting from family demand amid studio market turbulence

City main areas:

Downtown Dubai and Business Bay

Studio units: jumped 9.09% MoM to 90,000 AED (May 2025), outperforming the market average due to proximity to business hubs like DIFC or EMAAR Square.

In Business Bay, emerging value hotspot, the 2-Bedroom units: surged 9.09% MoM to 150,000 AED, capitalizing on demand for modern mid-tier housing. Studio units: stabilized at 70,000 AED (May 2025), offering 16.67% savings versus Dubai Marina’s studios.

4. Demand and Supply Dynamics

Supply-Side Dynamics and Future Outlook

May 2025 saw 1,691 new units delivered across Dubai, including:

The Paragon By IGO with 330 units - developer Invest Group Overseas

Maha Townhouses with 501 units developed by Nshama

Year-to-Date the number of completed units is sitting at 13,174

5. Market Outlook and Recommendations

For Investors: prioritize one-bedroom units in Downtown Dubai (125,000 AED) and Business Bay (95,000 AED) offer 6–7% yields with lower volatility than studios.

For Tenants: older buildings in Jumeirah Village Circle offer 12–15% discounts versus new developments.

For Developers: accelerate family-oriented projects. Business Bay’s 9.09% MoM growth in 2-bedroom units signals unmet demand for family housing.

Conclusion

Property rents in Dubai for May 2025 reveals a bifurcation: premium districts like Palm Jumeirah and Downtown Dubai maintain momentum for larger units, while studios face mounting pressure from supply growth. Investor confidence persists, but success requires granular market navigation.

For more detailed insights, stay tuned for our next monthly report to keep updated of the latest market developments in Dubai.

Source: DXB Interact