Apartment and villa rents in Dubai are projected to stabilise by the end of 2026, following nearly five years of sharp increases that saw rental rates double after the Covid-19 pandemic, according to market analysts.
Haider Tuaima, Managing Director and Head of Real Estate Research at ValuStrat, said rental growth is likely to flatten compared to 2025 levels, primarily due to a substantial pipeline of new residential supply expected to be delivered this year.
An increase in handovers is anticipated to place downward pressure on rents in areas such as Business Bay, Jumeirah Village Circle and Jumeirah Lakes Towers. According to Tuaima, if a large volume of units is delivered simultaneously, tenants will have more options, limiting landlords’ ability to raise rents and potentially leading to discounts.
Demand Drivers Behind the Boom
Dubai’s rental surge since 2020 has been fueled by a range of government initiatives, including residency permits for retirees and remote workers, the expansion of the 10-year Golden Visa programme, and overall economic growth across the UAE.
Population growth in Dubai and Abu Dhabi, combined with a continued influx of high-net-worth individuals, has driven strong housing demand — pushing both property prices and rents higher.
Rachael Kennerley, Director of Middle East Research at Savills, noted that while some locations may experience softer rental performance due to increased supply, high-demand villa communities — where supply constraints remain — could continue to see stable or even rising rents.
Approximately 170,000 residential units are expected to be completed in 2026, with nearly 88 percent consisting of apartments, according to Savills. However, the exact number of units scheduled for handover remains uncertain.
Rental Activity Remains Strong in 2025
Despite expectations of moderation, Dubai’s rental market delivered solid performance in 2025.
According to data released by the Dubai Land Department and reported by the Dubai Media Office:
- Registered tenancy contracts rose 6% year-on-year to 1.38 million
- Total contract value increased 17% to Dh126.4 billion ($34.4 billion)
- New tenancy contracts climbed 10% to more than 513,000
- Renewals increased 3% to over 514,000
Officials stated that this balanced performance aligns with the goals of the Dubai Economic Agenda D33 and the Dubai Real Estate Sector Strategy 2033, both of which aim to strengthen market sustainability, enhance quality of life, and reinforce Dubai’s global appeal as a destination to live, work, and invest.
The Real Estate Sector Strategy 2033 targets doubling the sector’s contribution to Dubai’s GDP to approximately Dh73 billion and increasing real estate transaction volumes by 70 percent to Dh1 trillion.
Development Pipeline Expands
Construction and development activity across Dubai remained strong in 2025 as demand from buyers continued.
Completed real estate projects rose 7 percent year-on-year to 124 developments, with a total value of Dh27.5 billion — up 23 percent from the previous year.
Meanwhile, projects under construction increased by 25 percent to 937, reflecting sustained confidence in the emirate’s long-term property outlook.
