Dubai Real Estate Enters a New Era

Rental Prices Growth Slows, New Properties Hit Dubai Market

Changes in the Dubai real estate market indicate a slowdown in rental price growth, moving towards a long-awaited equilibrium. In January 2025, for the first time in over two years, property prices decreased in Dubai, clearly signaling market changes. The arrival of new properties on the market has opened up more options for renters, and rental prices are expected to stabilize in some areas.

Rental Prices Stabilization

Industry experts suggest that the slowdown in rental price growth is directly linked to the addition of new properties to the market. Renters now have more choices, increasing price sensitivity. Property owners offering competitive prices find tenants more quickly, while market mechanisms regulating higher prices also play a role in stabilization.

According to an expert: "More properties are appearing on the online rental market, reinforcing the trend of rental price stabilization in 2025. Renters have more choices and are increasingly price-conscious. Property owners offering competitive prices can find tenants faster."

The decrease in rental prices is not surprising, as significant growth has been observed in recent years. However, experts say that smaller price fluctuations are part of a healthy market cycle and contribute to long-term stability.

Property Price Decrease

In January 2025, property prices in Dubai decreased for the first time in over two years. According to Property Monitor data, average prices dropped by 0.57%, bringing the price per square foot to 1,484 dirhams (approximately 1,400 euros). This was the first price drop since the summer of 2022, clearly indicating that the market is cooling.

Over the past four years, the Dubai real estate market has seen unprecedented growth, with prices rising by more than 30% in 2024. However, by 2025, a shift towards market equilibrium is expected, creating more favorable conditions for renters.

Impact of New Properties

Real estate analyses suggest that fewer new properties were introduced to the market in 2024 than initially predicted, but significant growth is expected in new projects by 2025. According to Asteco real estate consulting firm, if most of the planned new properties hit the market, rental price growth could decrease further or even stagnate in some areas.

Asteco estimates that in 2025, 63,900 new apartments and villas will be available, marking a significant increase compared to 2024, when 33,625 new properties were built. According to Cavendish Maxwell real estate consulting, by the end of 2027, an additional 243,000 new property units could enter the market, 80% of which will be apartments. This could further alleviate price and rental pressures in Dubai.

Key Areas

The majority of future new properties will be introduced around Jumeirah Village Circle, with nearly 25,000 new units being built there by 2027. This is followed by Business Bay (16,000 units), Azizi Venice (13,500 units), Damac Lagoons (11,100 units), and Arjan (9,000 units).

According to Betterhomes, the strongest rental price increase was observed in Al Khail Heights apartments, where rental prices rose by 6.6%, and the average rental price adjusted to 66,900 dirhams (approximately 16,700 euros). Palm Jumeirah townhouses came in a close second, where rental prices increased by 6.5%, and the average rental price rose to 127,300 dirhams (approximately 31,800 euros).

Summary

The Dubai real estate market is at a turning point. With new properties entering the market, rental price growth is slowing, and the market is moving towards balance. This creates more favorable conditions for renters while property owners need to offer competitive prices to retain tenants. Future new projects are expected to further relieve price pressures and contribute to the market's long-term stability.

The Dubai real estate market thus stands on the threshold of a new era where stability and sustainability become the main focus instead of growth.