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Tenants in some of the older buildings of Dubai will be able to negotiate rentals with landlords as new supplies hit the market.
Real estate industry executives believe that owners of older buildings will have to offer some incentives to maintain strong occupancy. However, rents could decline in certain areas which will witness strong new supply in 2025.
In addition, more cheque payments, long-term tenancies and renovation of properties to attract new tenants will dominate the tenant-landlord relationship in Dubai in 2025 as rents will maintain an upward trajectory next year.
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However, industry executives believe that rents will continue to rise in 2025 – but at a slower pace.
As reported by Khaleej Times, rents in the emirate are forecast to increase by around 10 per cent in 2025 with strong new supply also coming into the market.
Rupert Simmonds, director of leasing at Betterhomes, said landlords have benefited from several years of rising rental prices. However, the rapid pace of increases seen in recent years is unlikely to continue.
“As a result, landlords may prioritise long-term tenancies to secure stable income and maximise the current market conditions. For tenants, moving can be a hassle, especially after experiencing significant rent hikes in recent years. Many are now seeking the security of longer tenures, leading to a trend of tenants staying in their homes for extended periods. This benefits both parties, providing tenants with stability and landlords with reduced turnover costs and fewer vacancies,” added Simmonds.
"There is one significant factor shaping Dubai's rental market — the pace of new property handovers is being countered by an exponentially growing population. New arrivals from around the world are drawn to Dubai’s unique lifestyle benefits, its welcoming culture, year-round sunshine, diverse experiences, and financial advantages,” said Simmonds, adding that in 2025, rental prices are expected to find balance, driven by affordability, expanding communities within commutable distances, and evolving supply and demand dynamics.
Highlighting new trends, Haider Tuaima, director and head of real estate research at ValuStrat, said some villa landlords may have to allow for more cheque payments and perhaps be required to renovate their properties to entice new tenants. “New tenants will have some power to negotiate rental rates, and existing tenants can expect no increases to their current contracts.”
Ramjee Iyer, chairman and managing director, Acube Developments, said the market may see some flexibility in a number of cheques from savvy landlords who want to appeal to a broader base of tenants, especially with so many new arrivals to Dubai. “There will also be a greater openness to the holiday rentals sector which is booming at the minute in the emirate. On the tenant side, same as 2024 – a willingness to look further outside the main Dubai city areas in order to get more space and more bang for their buck,” added Iyer.
Ramjee Iyer said it's unlikely that rents will decline significantly in Dubai in 2025.
“However, some areas could see a stabilisation or even a slight decline in rents in 2025 due to increased supply. These areas are primarily non-prime locations where a significant number of new properties are expected to be completed. Some include International City, Al Quoz, and Dubai Studio City, among others,” he added.
While a widespread decline in rents is unlikely, Rupert Simmonds of Betterhomes said localised decreases could occur in areas with substantial new supply and limited demand such as Jumeirah Village Triangle (JVT) and Dubai Land Residential Complex.
“With ongoing handovers, landlords might adjust pricing to remain competitive. Additionally, older buildings in traditionally popular areas like Bur Dubai and Deira may face pressure to reduce rents to compete with modern developments offering enhanced amenities,” he added.
Yogesh Bulchandani, CEO of Sunrise Capital, says some stabilisation or slight declines might occur in Dubai neighbourhoods with a significant influx of new developments or oversupply. “Areas further from the city's central business districts or those catering to mid-range rental markets could potentially see a cooling effect.”
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