Dubai’s real estate market is showing signs of stability with rental listings remaining unchanged during the second quarter of 2024. Despite this, rents are expected to continue rising, albeit at a slower pace. Data from the Dubai Land Department revealed that more residents renewed their tenancy contracts as rentals reached all-time highs in the emirate. Taimur Khan, head of research at CBRE, stated that rates in both sales and rental markets are expected to rise, but not as rapidly as before.
The report also mentioned that in the first half of 2024, 88.1 per cent of sales listings and 73.8 per cent of rental listings remained unchanged, indicating a more stable market compared to the previous year. Khan expressed optimism about the performance of Dubai’s residential market in the near future. The influx of high-net-worth individuals into Dubai has contributed to the continuous rise in rentals and prices, particularly in the prime segment, leading to record-high transactions in the emirate.
Average residential rents grew by 21.1 per cent in the year leading up to June 2024, with apartment rents increasing by 22.2 per cent and villa rents by 12.7 per cent. The average annual rents for apartments and villas were recorded at Dh127,969 and Dh354,512, respectively. During the first half of the year, Palm Jumeirah and Al Barari were reported to have the highest apartment and villa annual rents, with average rents of Dh279,826 and Dh1,344,844, respectively.
The data from the Dubai Land Department also showed a significant increase in the number of rental contracts registered in the first half of 2024, with a total of 299,564 contracts, up by 52.5 per cent from 2019 and 5.8 per cent from the same period in 2023. Khan attributed this increase to a surge in the number of renewed contracts, indicating that tenants are opting to renew existing leases rather than leasing new units at much higher costs. This trend reflects the current market dynamics and tenants’ preferences in Dubai’s real estate sector.
Overall, the real estate market in Dubai remains robust, with rental rates expected to continue growing, although at a more moderate pace. The stability in the market, coupled with the high demand from high-net-worth individuals, has contributed to the continuous increase in rentals and prices in the emirate. The preference for renewing tenancy contracts over leasing new units indicates that tenants are looking for stability and affordability in the current market scenario. As Dubai’s residential market continues to show strength, it is anticipated that this trend will persist in the upcoming period, providing opportunities for both tenants and investors in the real estate sector.
