For the remainder of 2024, rental prices in Dubai are projected to increase by 10%, sparking widespread interest in the city's future real estate trajectory. Industry executives have disclosed that despite a 10% rise in rental rates in the first half of this year, this growth trend is expected to persist in the latter half.
Key drivers behind Dubai's rental price surge include population increases, influx of high-net-worth individuals, and economic expansion, factors which have generated new employment opportunities and leasing demand in the market. Jacob Bramley, Senior Leasing Manager at Betterhomes, indicates that based on the early 2024 trend of 10% growth, a steady rise in rents can reasonably be expected over the coming months, with growth rates projected to range between 5% and 10%. He notes that the third and fourth quarters will see more new housing units entering the market, further supporting rental growth.
Lewis Allsopp, Chairman of real estate firm Allsopp & Allsopp, forecasts that Dubai's rental market may enter a more stable and progressively growing phase in the latter half of 2024 and into 2025. He anticipates that over 10,000 new housing units will be completed and listed in the coming quarters to meet the growing demand for leasing. Additionally, with over 6,700 millionaires set to relocate to Dubai according to the latest market analysis, this is expected to further drive market demand and rental levels upward.
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Dubai's real estate market demonstrated significant growth in the first half of 2023, with average rents increasing by 15.7%. Specific to different types of housing, apartments and townhouses saw slightly lower increases just under 15%, while villas experienced an average rental increase of 18%.
According to data from Betterhomes and Allsopp & Allsopp, average leasing contract prices increased by 8% in the first half of 2023, continuing an 8% growth trend from the previous year's second half.
Performance in specific areas has been notable, with the highest rental increases observed in Dubai Production City, Dubai Healthcare City 2, Jumeirah Beach Residences (JBR), Town Square, and Meydan, ranging from 21% to 22%. Additionally, the southern region of Dubai saw significantly higher rental increases, approximately 38%, closely tied to anticipated demand growth from the new Al Maktoum International Airport development and surrounding community constructions.
In upscale luxury communities, Jumeirah Islands and Al Barari recorded particularly substantial increases in rents in the first half of the year, at 43% and 39%, respectively.
