Despite growing talk of rent moderation in Dubai, many residents are experiencing a very different reality, facing yet another round of steep rent increases. A significant number of tenants are now forced to make quick decisions on whether to renew their leases or vacate, as landlords impose double-digit rent hikes for the second consecutive year.
The surge follows the launch of the Dubai Land Department’s real-time Rental Index in January, which many landlords are using to justify raising rents to current market levels. According to leasing agents, there is little sign of any widespread rent correction at present.
“Landlords who are eligible to increase rents based on the updated Rental Index are doing exactly that,” said one agent. “They’re within their rights, and it’s ultimately up to tenants to decide whether to stay or move out.”
Tenants now face a dilemma: remain in their current homes and accept another substantial increase, or seek alternative housing, where they may still encounter elevated rent levels citywide. While there are reports of some easing in rental prices at older properties—especially those restricted under the star rating system of the updated index—these instances remain the exception.
Rupert Simmonds, Director of Leasing at Betterhomes, believes long-term tenants are particularly vulnerable to these repeated hikes. “Many of these residents have been in their homes for three to four years and were paying below-market rates during the COVID period,” he explained. “Now that landlords have the opportunity, they’re aligning those rents with current market trends, which have risen considerably over the past year.”
This rent adjustment trend comes at a time when new residential units continue to enter the market. Yet, the expected supply surge has to ease upward pressure on rents. Developers, including Symbolic Developments and Speedex Group, are bringing new projects to market with a mix of end-user and investment buyers.
“Our first freehold project in Liwan has seen around 40% of units allocated for rental, with the remaining 60% bought by end-users,” said Murtaza Moiz, Vice-Chairman of the group. “Rental rates in Liwan currently range between AED 65,000 to AED 70,000 for one-bedroom apartments and AED 100,000 to AED 120,000 for three-bedroom units. These figures reflect strong returns, and we expect further growth as infrastructure in the area continues to improve.”
Other high-growth areas such as Arjan, Sports City, and Dubai South are also seeing new residential deliveries, with many of the units expected to enter the rental pool. Market analysts estimate that between 70,000 and 100,000 new units could be handed over by the end of the year.
If a large portion of this inventory enters the rental market, it could finally bring a degree of balance. “Should rental rates stabilize, that’s good news for landlords,” said a real estate expert. “A minor drop of 5% to 10% benefits tenants and indicates improving supply. But a larger correction of 15% to 20% could point to a broader market downturn.”
Until then, tenants in Dubai continue to navigate a challenging rental landscape, weighing rising costs against limited affordable alternatives.