Rents in Dubai have increased by around 10% in the first half of this year, with industry experts predicting a similar rise in the second half.
The steady rise in rental prices is attributed to the growing population, the influx of high-net-worth individuals, and economic expansion that has created new job opportunities.
Jacob Bramley, senior leasing manager at Betterhomes, stated that with a 10% increase at the beginning of 2024, a similar growth for the rest of the year is anticipated. He expects continued supply and steady growth of 5-10% over the next six months as more handovers occur in the third and fourth quarters.
Lewis Allsopp, chairman of Allsopp and Allsopp, projected a shift towards more gradual rental growth in the latter half of 2024 and into 2025, as additional supply enters the market. Over 10,000 new units are expected in Q2 alone. This increase in supply is crucial to accommodate further population growth, with over 30,000 new residents moving to the city in the first five months of 2024.
A report suggests that over 6,700 millionaires are expected to enter the city, further fueling population and real estate market growth. Landlords are offering flexible payment options such as multiple cheques to help tenants manage the rising costs.
In the first half of 2024, average rents across Dubai saw a 15.7% increase compared to the same period in 2023. Apartments and townhouses experienced an average increase of just under 15%, while villas saw an 18% rise. The updated RERA Index, implemented in March, has brought previously undervalued units closer to the market average, contributing to overall rental increases.
According to Betterhomes, the average rental contract price increased by 8% in the first half of 2023 and another 8% in the second half of the year. Areas like Jumeirah Beach Residence, Town Square, Dubai Production City, Dubai Healthcare City 2, and Meydan saw rental increases of 21-22% in the first half of 2024. Dubai South experienced a 38% rise, aligning with the anticipated demand following the announcement of the new Al Maktoum Airport.
Luxury communities such as Jumeirah Islands saw a 43% increase in average rents, reaching Dh500,000 in H1 2024 compared to Dh350,000 last year. Al Barari also saw a significant rise, with average rental prices increasing from Dh300,000 last year to approximately Dh400,000 in H1 2024, marking a 39% increase.
Bramley noted strong performance in areas like Tilal Al Ghaf (21% increase), Dubai Hills Estate (14%), The Villa Project (12%), and Dubai Creek Harbour (11%), all seeing over a 10% rise in average rental price per square foot.
These trends reflect the dynamic nature of Dubai’s real estate market, driven by a growing population, economic expansion, and increasing demand for high-quality living spaces.
