As Dubai continues to experience robust real estate development, tenants in some of the city's older buildings may find room to negotiate lower rents, according to industry experts. The influx of new properties expected to hit the market in 2025 is prompting landlords of older buildings to consider offering incentives to maintain occupancy rates.
Rupert Simmonds, director of leasing at Betterhomes, noted that while the Dubai rental market has seen significant increases in recent years, the pace of growth is expected to slow down. "Landlords are recognizing the benefits of securing long-term tenants to stabilize income, which could lead to more favorable terms for renters," Simmonds explained.
Additionally, the trend toward longer lease periods and the possibility of more flexible payment options are becoming more prevalent. Haider Tuaima, director and head of real estate research at ValuStrat, suggested that "some villa landlords may need to accept more cheque payments and even renovate their properties to attract new tenants."
The shifting dynamics in the rental market also reflect a broader population growth and an increasing number of new arrivals in Dubai, drawn by the city's lifestyle and economic opportunities. This is leading to a demand for rental accommodations that offer good value, particularly in areas outside the main city districts where tenants can get more space for their money.
Despite the potential for more negotiation leverage, significant decreases in rental prices are not widely anticipated. However, localized declines might occur in areas with an oversupply of new developments, such as International City, Al Quoz, and Dubai Studio City. Ramjee Iyer, chairman and managing director at Acube Developments, pointed out, "In non-prime locations where substantial new properties are completed, rents might stabilize or even see a slight decline."
The real estate market in 2025 is poised to find a balance driven by affordability, the evolving supply and demand dynamics, and expanding communities within commutable distances of the main business districts.
