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Dubai Residential Rent Growth Expected to Slow in 2024
Jul 5, 2024
Dubai Residential Rent Growth Expected to Slow in 2024 Dubai
By   Internet
  • City News
  • Dubai Real Estate Market
  • Dubai Rent
  • Residential Rent
Abstract: According to the latest report from real estate consultancy CBRE, residential rent growth in Dubai is expected to slow in 2024, although rents will continue to rise. The report highlights that as "affordability constraints start to ease," rent increases in several key and major residential areas are trending toward single-digit percentages.

Data shows that the average residential rent increased by 21.1% in May this year, slightly higher than the 20.8% increase in April. Specifically, apartment rents rose by an average of 22.2%, while villa rents increased by 13.1%. In May, the average annual rents for apartments and villas were AED 126,598 and AED 352,572, respectively. Among all areas, Palm Jumeirah had the highest annual rents for apartments and villas, averaging AED 272,867.


CBRE notes that despite the slowdown in rent growth, Dubai's real estate market remains vibrant. Rent increases in several major residential areas have started trending toward single digits, which is good news for tenants as it indicates that the upward pressure on rents may ease. However, the overall market remains on an upward trajectory, indicating strong demand.


The report also mentions that rent increases in prime residential areas of Dubai have driven up rent prices in secondary communities. These secondary communities are experiencing significant annual rent growth, reflecting the broad and diverse demand in the market. Rent increases are not limited to high-end communities; more affordable secondary communities are also affected, making the overall rent market more complex and diverse.


 Dubai Residential Rent Growth Expected to Slow in 2024

Internet


In addition to rent increases, Dubai's real estate market is showing positive signs in other areas. According to the Dubai Land Department, the number of lease registrations in the first five months of this year reached 255,178, a 5.9% increase year-over-year. This growth is mainly due to a 12.2% increase in renewal lease registrations, while the number of new contract registrations decreased by 3.7%. This indicates that despite a decline in demand for new lease contracts, the demand for lease renewals remains strong, demonstrating the stability of the rental market.


CBRE economists point out that Dubai's real estate market is undergoing an adjustment period, but the overall trend remains positive. The easing of affordability constraints allows more people to afford rental housing, helping to maintain market stability and sustained growth. Despite the pressure from rising mortgage rates and living costs, Dubai's real estate market continues to attract strong interest.


In the long term, Dubai's real estate market is expected to continue to develop. With ongoing economic growth and infrastructure improvements, Dubai will continue to attract international investors and new residents. The diversity and adaptability of the real estate market will help Dubai face future challenges and seize new development opportunities.

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Dubai Residential Rent Growth Expected to Slow in 2024
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