Rent increases for homes in Dubai are expected to moderate next year, according to property experts.
While prime rents continue to move upwards, the broader market has shown clear signs of stabilisation through 2025, particularly in the mid-market and affordable segments, Prathyusha Gurrapu, head of research at Cushman & Wakefield Core, said.
With significant new supply expected across suburban and mid-market districts, rental growth is likely to moderate further as the market moves into 2026, she added.
“Yes, we expect moderation," said Farooq Syed, chief executive of Springfield Properties. "The 54,000-plus residential transactions and heavy development pipeline feeding into 2026 will add choice, especially in the apartment segment.
"Combined with slower third-quarter rent growth in several districts, this points to a flatter, more sustainable rental curve.”
Mario Volpi, senior vice president of investment advisory at Allegiance Real Estate, said the cooling of rents depends on three conditions:
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new supply coming online
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continued demand (population and business inflows)
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macroeconomic factors (currency moves and global capital flows)
If a substantial volume of new stock is delivered in 2026 while demand moderates, rents will ease; if demand keeps outpacing supply, they could stay firm, he said.
Signs to watch out for Mr Volpi added: “We should look out for these signals that would point to a cooling-off period: large volumes of completed deliveries in the submarkets that have seen the biggest rent spikes [which increases choice and reduces urgency]; softening leasing velocity or longer days-on-market on listings portals, this is an early sign that supply is outpacing demand; also, look out for economic or corporate slowdowns that reduce expatriate inflows.
“On the other hand, if office demand [and corporate relocations] and tourism continue strongly, they will prop up rents well into 2026," he added. "We would need to watch the fourth quarter delivery schedules carefully, portal absorption rates and Dubai Land Department leasing statistics for concrete signals.”
Dubai’s asking rents grew by 4.7 per cent in the third quarter of 2025, showing little change from the previous quarter, according to data from property consultancy ValuStrat.
Apartment rents continued to outpace villas, a trend persisting since 2024, with annual increases of 5.6 per cent and 3.5 per cent, respectively, the data revealed.
“Villa rents, having more than doubled since the pandemic, are nearing affordability ceilings, while apartments, representing 80 per cent of the market, have been catching up over the past two years,” said Haider Tuaima, managing director and head of real estate research at ValuStrat.
Communities with a high volume of scheduled handovers are likely to face downward pressure on asking rents. Notably, Jumeirah Village Circle (JVC) and Business Bay are expected to be affected, as they account for 20 per cent of the supply due for delivery in the next four years, Mr Tuaima added.
Are tenants being priced out? Many tenants are relocating from older central areas into new residential districts with more competitive pricing and modern amenities, including Dubai South, Al Furjan and JVC. Others are moving to Sharjah for additional value, according to Mr Syed.
Despite this shift, demand remains solid. Dubai has added more than 155,000 residents so far in 2025, keeping the rental market active but less concentrated in a few premium locations, he said.
Ms Gurrapu said that while rents remain high across the city, considerable new supply is being delivered in emerging communities such as JVC, Jumeirah Village Triangle, Dubailand and Dubai South.
“These submarkets are expanding rapidly, offering a wide spectrum of mid-market and affordable housing options. The influx of supply is catering to rising demand from young professionals, families and new residents who are priced out of prime districts.
"Over time, this pipeline is expected to ease pressure on rental growth in the mid-tier segment,” she added.
Mr Volpi said some tenants are being priced out of central/prime locations as rents continue their upward trajectory, and these households are moving to more affordable Dubai suburbs or to neighbouring emirates.
“When rents go up, tenants start to look at ways to remain or be clever with their moves, so within Dubai, tenants will trade location for space, for example moving from Dubai Marina or Downtown to JVT, JVC, Dubai Silicon Oasis or Dubai South, where rents are lower and yields higher.
"These areas have become landlords’ favourites for tenants looking to trade commute for affordability,” he explained.
“Some tenants who have tighter budgets move to other emirates such as Ajman, Sharjah or Ras Al Khaimah, where rents can be a fraction of Dubai’s core.
"This trend accelerated since last year and is visible in lease registration spikes in these neighbouring emirates. These moves do, however, come at the expense of extra commute and lifestyle trade-offs.”
Mr Tuaima said tenants with sufficient spending power are increasingly considering home ownership, “a trend expected to strengthen as interest rates decline and the cost of mortgages becomes more affordable”.
Where are rents increasing? Nad Al Sheba recorded the sharpest average rent growth this year with a 28 per cent increase to Dh222,000, followed by Jumeirah up 23 per cent to Dh226,000, Mr Syed said.
Other family-focused areas such as The Villa (up 7 per cent), Living Legends (up 6 per cent) and Sobha Hartland (up 6 per cent) also posted solid gains. In contrast, rents in communities such as JVC, Arjan, The Greens and Al Barsha have largely stabilised, he said.
“In the third quarter of 2025, average apartment rents in Dubai were Dh75,317, up about 6 per cent compared with a year ago. Villas averaged Dh265,055, up about 7 per cent. These increases are much smaller than the double-digit jumps we saw in 2023–2024,” he added.
Meanwhile, Ms Gurrapu said that prime districts such as Downtown Dubai and Palm Jumeirah continue to record double-digit rental growth, while areas like Jumeirah Lakes Towers, Dubai Marina and Business Bay have largely stabilised, with marginal declines in some recent months.
Mr Volpi said rents rose the fastest in established areas such as Dubai Marina, Jumeirah Beach Residence, Downtown and Business Bay.
“Rents are stabilising or rising more slowly in mature, mid-market villa communities and older established towers, for example some older properties in The Springs and Arabian Ranches,” he said.
“Pockets of older Al Barsha have been steadier because they have deeper supply and longer-term tenants. Value or affordability seekers have also moved to JVC, JVT, Dubai Silicon Oasis and Discovery Gardens, where rises are more measured.”
