Dubai’s rental market is poised for significant growth in 2025, fuelled by a growing population, rising global interest, and limited housing supply.
While the market has seen some stabilisation recently, rents are expected to increase by 10-12 percent on average in the next year.
Luxury properties and centrally located apartments could see even higher growth, with projected hikes of 15-18 percent.
Key areas with projected Rental increases
The areas likely to experience the steepest rent hikes are concentrated in both luxury and emerging residential zones.
Luxury Locales
Palm Jumeirah and Dubai Marina remain hotspots due to waterfront living and high demand among affluent expatriates.
Downtown Dubai and Jumeirah Bay Island will also see notable hikes, projected at 10-12%.
Emerging Hubs
Dubai South, bolstered by large-scale infrastructure projects like Al Maktoum International Airport, is expected to witness strong demand.
Jumeirah Village Circle (JVC) and Town Square may see moderate increases of 2-5%, absorbing much of the new housing supply.
Affordable Neighbourhoods
Outlying areas such as International City and Al Furjan are forecast to maintain stable pricing, with minimal hikes of around 2–5%.
Property prices expected to stabilise
While rents climb, Dubai’s property prices are projected to stabilise after years of rapid increases. Analysts anticipate a moderate eight percent rise in overall residential property prices in 2025, with luxury properties seeing slower growth at around five percent.
Faisal Durrani, head of Middle East research at Knight Frank, explained that the market “is maturing, with regulatory measures and increased end-user participation reducing speculative activity.”
New supply will also play a crucial role. With an estimated 100,000 apartments and villas entering the market by the end of 2025, the increased housing stock is expected to ease pressure on prices, particularly in suburban and affordable segments.
Outlook for Renters and Investors
The outlook for Dubai’s rental market remains robust, especially for investors seeking high yields. Average rental returns across the emirate are currently 6-7 percent, with prime areas exceeding eight percent.
In 2025, renters can expect challenges in securing affordable housing in prime areas, pushing many to explore suburban options. For investors, the growing population and steady influx of expatriates present a strong case for continued rental market growth.