The rental market in Dubai is experiencing a widening gap between asking and bid rates, with landlords demanding higher rates due to growing demand and tight supply. Real estate industry executives have reported a disparity of up to 50 per cent in some areas of the emirate between the sale prices of rented and empty units. This trend is driven by the local population growth outpacing the supply of residential units, leading to landlords charging exorbitant rents for their properties.
With Dubai’s population growing by nearly 25,700 in the first quarter of the year, demand is outpacing supply as only 8,350 units were delivered during the same period. This imbalance has made Dubai a landlord market in terms of rentals, with a significant disparity between asking rent and renter offers. Sachin Kumar Singh, business head at Foremen Fiefdom, highlighted the growing disparity and emphasized the importance of finding a balance in rent stabilization regulations to ensure a healthy rental market.
Usama Sukhera, leasing team leader at Huspy, also noted the widening gap between asking and bidding in the rental segment. He mentioned a significant increase in this gap from January 2023 to January 2024 but expressed optimism that measures taken by Dubai Land Department and the recalibration of the Rera calculator would stabilize the market. Prathyusha Gurrapu, director at Cushman and Wakefield Core, pointed out the impact of the recalibrated Rera calculator in reducing disputes over rental increases and bringing alignment with open-market pricing.
Owners in Dubai are pricing their properties aggressively due to high market confidence, according to Jacob Bramley, senior leasing manager at Betterhomes. He mentioned that recent increases have given owners more margin to meet their desired prices, and many listings achieve asking prices. However, landlords may need to accept a vacant period to reach their desired price, reflecting the delicate balance between demand and supply in the rental market. In conclusion, finding a balanced approach through regulations and market measures will be key to sustaining a healthy and sustainable rental market in Dubai.
