The rental growth in Dubai’s real estate market has seen a significant surge in popular areas such as Palm Jumeirah, Dubai Marina, and Downtown following the outbreak of the pandemic. Data from Asteco reveals that Jumeirah Village and Jumeirah Beach also experienced high rental growth in the apartment category. In the villa category, areas like Jumeirah Islands, Palm Jumeirah, Dubai Sports City, Dubai Hills Estate, and Damac Hills saw the highest rental growth between the first quarter of 2021 and Q1 2024.
The property market in Dubai made a strong recovery post-Covid, with luxury properties leading the way in terms of growth and demand from foreign investors. The initial recovery was most prominent in the luxury segment, but growth has been seen across all property types. As a result, the emirate saw a significant increase in population, surpassing the 3.7 million mark in June 2024.
John Allen, CEO of Valuation and Advisory at Asteco, highlighted that properties in highly sought-after areas like Dubai Marina, Downtown Dubai, and Palm Jumeirah command premium rents due to their exclusivity, amenities, and proximity to key business districts and leisure attractions. Features such as self-sufficient communities, advanced technology integration, larger units with outdoor space, lower density developments, and increased storage space are driving rental demand.
Areas with the lowest rental increases include Meydan/MBR City, Mirdif, Bur Dubai, Dubailand, and Deira in the apartment category, and Damac Hills 2, Dubailand, Dubai Silicon Oasis, Mirdif, and Reem in the villa segment. Oversupply in some areas, particularly in tertiary locations and older properties with dated amenities, may experience slower rental growth due to less competitive positioning. Established areas like Deira, Bur Dubai, and Mirdif also saw more moderate growth rates.
Looking ahead, Asteco does not believe in the ‘undersupply’ scenario in the local property market. While popular locations will continue to see strong demand and moderate rental growth, tertiary locations like areas along Dubai-Al Ain Road, Lehbab Road, Al Qudra Roundabout, and the E611 corridor are expected to see an uptick in rental rates. Affordability concerns are driving tenants towards previously less sought-after areas with improved infrastructure, accessibility, and amenities.
Overall, Dubai’s economy has shown resilience, attracting skilled professionals and expatriates, which will ensure sustained demand and resilient rental rates in the residential market. With a focus on enhancing quality of life and fostering a robust economic environment, Dubai is set to continue drawing a significant influx of expatriates in the future.
