A new report reveals the latest trends for rental properties in Dubai’s real estate market in Q1 2024
The rental market in Dubai continues to show growth, according to the latest quarterly report by real estate portal Bayut.
The first quarter of this year saw rental prices for both apartments and villas increase by up to 17 percent, spanning affordable, mid-tier, and luxury market segments.
This continued increase has been fueled by strong demand among local and overseas property seekers, resulting in tenants facing increasing pressure on their budgets. This has forced many to seek out cheaper alternatives such as moving out to less central areas or to buy property instead of renting at such high prices.
Yet, according to the search trends analysed on Bayut, the upward trend in property prices across Dubai has stabilised considerably, with certain areas even reporting declines in average prices.
This comes as there is a healthy influx of new properties, ensuring adequate supply to meet the demand for housing within the emirate.
Apartment rentals see highest price increase
There has been a significant increase of up to 17 percent in apartment rental prices in neighborhoods including Deira, Internet City, and Al Nahda this year. These areas are gaining popularity among budget-conscious tenants due to their affordability. Typically, the affordable apartment market segment sees rental increases of only 1 to 5 percent, signaling a significant increase.
Average annual rents for a two-bedroom apartment are now approximately AED 76k in Deira, AED 55k in Al Nahda and AED83k in Internet City, according to Bayut’s data.
Mid-tier apartments in Jumeirah Village Circle, Bur Dubai, and Dubai Silicon Oasis have also seen a significant increase in rental prices, with select properties recording upticks of up to 12 percent.
Conversely, luxury apartment rentals have witnessed decreases of up to 4 percent. Despite this, Dubai Marina and Business Bay remain popular destinations for luxury apartment rentals, with the most search activity on Bayut in these areas.
Rental trends for villas
For tenants looking for affordable villas, DAMAC Hills 2 and Mirdif have gained the most attention, according to the report. These neighborhoods offer competitive rental prices and are popular among tenants looking for more spacious accommodation options. Villa properties this year have generally become cheaper, recording a price increase by up to 3 percent since the beginning of this year.
There is a noticeable resurgence in the demand for family villas. The market has witnessed a heightened interest in larger family-oriented residences, particularly within luxury and mid-tier communities, indicating a shift towards more spacious properties and a preference for family-friendly living environments.
Mid-tier villas in select areas of Jumeirah Village Circle (JVC) and Arabian Ranches 3 have gained popularity, with rental prices increasing by up to 17 percent. This figure is in line with the typical increase for mid-tier villa rentals this year, which has been around 12 percent.
Meanwhile, luxury villa rentals have seen an increase by 13 percent with areas such as Dubai Hills Estate, Al Barsha and DAMAC Hills being the most popular. Four-bed homes in Al Barsha and DAMAC Hills recorded slightly higher rental increases of up to 14 percent.