In the first half of 2024, rental prices have risen by an average of 13.5%. By the end of 2024, growth is expected to reach around 20%. This upward trend will continue in 2025.
"Our forecasts for 2025 predict an 18% increase in short-term rentals (up to 6 months) compared to 2024, with long-term rentals (6 months or more) expected to rise by around 13%. Our data shows that rental prices have increased by an average of 16% since the beginning of this year. Traditionally, there’s a peak in prices during the high season and a drop in the low season (summer months)," says Nina Novikova, Chief Business Development Officer at Colife Dubai.
The real estate market is expected to experience organic growth, indicated by rising property values, an increase in new towers, and higher transaction volumes in both sales and rentals. The UAE Central Bank forecasts national GDP growth of 6.2% in 2025, driven by the development of the real estate sector. The amount of luxury projects is expected to decrease in 2025, as developers will continue to focus on affordable and mid-range real estate.
The growth in rental prices is closely tied to rising property prices. According to Bayut, property prices in Dubai increased by 41% in the first half of 2024, accompanied by a rise in transaction volume. Over 43,000 real estate transactions were completed in Dubai in the first half of 2024.
The market expects that the housing supply will increase by approximately 182,000 units in 2025-2026, as a large number of properties that were pre-sold in 2022-2023 will be completed. Of these, approximately 76,000 units are expected to be completed in 2025. As housing prices rise, investors are purchasing more expensive properties and renting them out at higher rates to get passive income. Demand for rentals remains consistently high among tenants, both for short- and long-term rentals.
One of the most effective ways to save on rent is to rent long-term, as longer rental periods often come with lower monthly rates. A one-year contract can provide significant savings, especially with lower prices during the summer.
For example, a one-bedroom apartment in JLT from Colife costs AED 9,500 per month on a 12-month rental, while a 3-month rental for the same unit costs AED 10,700 per month.
An increasing number of professionals from around the world are moving to Dubai for work, which inevitably drives up rental prices. Attracted by career opportunities, competitive salaries, high quality of life, and a warm climate, Dubai continues to see population growth. According to Dubai's 2040 Urban Master Plan, the city’s population is going to reach 5.8 million. As more professionals arrive, demand for housing continues to rise as prices. So, the trend of rising rental costs is expected to persist in 2025
