The Dubai property market is experiencing a sharp surge in rental prices for luxury apartments due to a shortage of ready-to-occupy high-end properties, say real estate experts. The growing demand from high-net-worth individuals (HNWIs) relocating to the emirate has further strained an already limited supply.
Soaring Rental Costs
The scarcity of luxury apartments has led to record-breaking rental deals. One notable example is a Dh4.4 million agreement for a 10,000-square-foot penthouse at The Royal Atlantis Resort & Residences on Palm Jumeirah. This penthouse, Dubai’s most expensive rental to date, features four bedrooms, a library, and an exercise room, coupled with hotel concierge services and turnkey amenities, making it highly desirable for affluent tenants.
According to Vladimir Minaev, luxury property specialist at Metropolitan Premium Properties, “We only have a handful of truly luxurious options available. HNWIs moving to Dubai often rent while scouting for the perfect locality, but the limited availability is driving rental prices higher.”
Evolving Definition of Luxury
The concept of luxury in real estate has broadened significantly, says Rohit Bachani, co-founder of Merlin Real Estate. “Luxury now encompasses lifestyle, amenities, and a strong sense of identity, not just opulence. The influx of HNWIs is diversifying the market and redefining what buyers look for in high-end properties.”
Limited Supply, High Returns
Developers are struggling to meet demand. Jeff Raju Kuruvilla, CEO of Manifest Real Estate, explained that off-plan properties in the luxury segment are selling out within hours of launch and fetching premium prices in the secondary market. “The rental yield of 5 to 7 percent in luxury properties is attracting new investors to prime locations like Palm Jumeirah, Downtown, and Business Bay,” he added.
Luxury rentals remain rare, as many buyers prefer to own and resell such properties. Penthouses, in particular, are limited in availability compared to villas, leaving prospective renters with few choices.
Branded Residences: A Growing Trend
Dubai’s luxury market has seen increased interest in branded residences, which combine exclusivity with world-class amenities. These high-demand properties reflect the city’s ability to continually innovate and attract global attention, even as supply remains tight.
The soaring demand and rising prices underscore the need for new luxury projects to cater to Dubai’s expanding affluent population.
