According to real estate sector insiders, the strong demand from millionaires and the limited new supply could result in substantial rent hikes in upscale locations. Because of the high rates in core regions, residents will move to the outskirts of the emirate, resulting in considerable increases in other areas as well.

The primary driver of property rentals and price hikes in the years after the epidemic has been the growing population. The Dubai Statistics Center reports that the emirate's population increased by 159,522 year-to-date to 3.814 million on December 10 from 3.654 million at the end of the previous year.

Rents have increased due to the influx of new inhabitants. A home was leased for Dh15.5 million annually in October, while a penthouse was rented for a record Dh4.4 million earlier this week.

rising trajectory throughout the upcoming year

Rents in the emirate will continue to rise in the upcoming year due to the anticipated 2025 inflow of professionals, high-net-worth individuals, and those looking for better opportunities.

Although at a slower rate than the peak years of 2022 and 2023, the rental market saw an average growth of between 15-20% in most locations in 2024, according to Rupert Simmonds, director of leasing at Betterhomes.

"We expect the growth rate to moderate as we look to 2025, with an estimated 5–10% increase in rental prices throughout the city. Tenants' increasing desire to secure long-term leases at existing rates and additional supply from new property handovers are the reasons for the cooling pace, Simmonds added.

Residential rents for new contracts increased by 5% for villas and 16% for flats in 2024, according to Haider Tuaima, director and head of real estate research at ValuStrat. "While apartment rents continue to rise to 10% over the next 12 months, villa rents are likely to stabilize."

According to Andrew Cummings, head of Savills' Middle East residential agency, rentals in Dubai are expected to rise by 10–12% overall in 2025.

Because of the increasing demand for urban living, the migration of expats, and Dubai's ongoing attraction as a global hub, apartments are expected to increase more quickly than villas. Rents are also rising as a result of the scarcity of good residential properties, especially in central locations, Cummings continued.

"The overall demand for rental properties is expected to outweigh supply in most submarkets, keeping rental values on an upward trend, even though some areas may see stabilization due to new supply," he continued.

In 2024, the average rental rise was between 10 and 15 percent, but prime neighborhoods witnessed a 20 percent increase, according to Ramjee Iyer, chairman and managing director of Acube Developments.

Yogesh Bulchandani, the CEO of Sunrise Capital, echoed his colleagues in the industry when he stated that the city's expanding population and international investor interest were the main drivers of the rental market's strong 15% increase in 2024.

"I predict an average rental growth of 10–13 percent for 2025, with some segments, like luxury properties, potentially seeing growth of 15–18 percent, especially for short-term rentals."

In which areas will rents increase the most in 2025?

Bulchandani predicted that while emerging hubs like Dubai South, which benefit from massive infrastructure projects like Al Maktoum International Airport, are poised for notable growth, luxury areas like Jumeirah Islands and Al Barari will probably continue to see significant rent hikes due to limited supply and high demand.

"The balance of supply and demand may lead to more stable growth in established neighborhoods like Dubai Production City, Town Square, and Jumeirah Beach Residence (JBR)."

Due to a shortage of supply and the influx of wealthy foreign workers and professionals from around the world, Rupert Simmonds predicted that premium and beachfront areas like as Dubai Marina, Palm Jumeirah, Downtown Dubai, and Jumeirah Bay Island will continue to see strong demand.

"Rental hikes in some locations might be between 10 and 12 percent, which is the top end of the predicted range. Families looking for well-connected, lifestyle-oriented communities may also contribute to the remarkable growth of suburban areas like Arabian Ranches and Dubai Hills Estate.

Due to a greater number of new property handovers, the more affordable neighborhoods, such as Jumeirah Village Circle (JVC) and Al Furjan, may see only modest rental hikes of two to five percent. Due to competitive pricing and growing housing options, the rental market in outlying areas like Dubai South and International City may become more stable.

Ramjee Iyer predicts more growth in well-known areas with excellent amenities, such as Business Bay, Downtown Dubai, Palm Jumeirah, and Dubai Marina. Lower rental increases are anticipated in 2025 at Al Quoz, Jebel Ali Village, Al Barsha South, Al Warqa, and International City.

The lowest end of the market in Haider Tuaima experiences the largest rent hikes, especially for flats on the outskirts of Dubai.

An increase in rental prices in Dubai starting from the new year

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