Dubai's Rental Market: A Tenant-Friendly Shift

Balanced Rental Market: Tenant-Friendly Turn in Dubai's Housing Market

Based on real estate market reports from the second quarter of 2025, Dubai's rental market has entered a new phase. After years of dynamic price increases, a more moderate, balanced era is emerging, creating increasingly favorable conditions for tenants. Developers and landlords are forced to adapt to growing supply and changing demand – the city's rental market is clearly tilting towards tenants.

New Apartments, Abundant Supply, Slowing Absorption

In recent months, significant activity has been observed in Dubai's real estate market: by August 2025, nearly 93,000 new residential units were introduced, with an estimated total sales value reaching 270 billion dirhams. According to data from Reidin and Property Monitor, more than 13,800 new residential properties hit the market in July alone, under more than 50 new projects.

This impressive volume has not gone unanswered: signs of slight demand decline, or 'softening absorption', are increasingly felt. Buyers and tenants have become selective, and the market's natural reaction is adaptation – particularly in the rental segment.

Tenants Regain Control

Due to increased supply and moderating demand, landlords have become more competitive. More and more are offering one-month rent-free periods, flexible installment plans with multiple checks, waiving landlord commissions, and even taking on utility bills. These incentives become particularly attractive to those who have been waiting or looking to move to another district in hopes of a better offer.

According to CBRE, this tenant-friendly shift is partly because more people are opting to purchase properties, increasing the number of rental apartments on the market for a longer period. Landlords are forced to respond: they compete not just on price but also on service.

Renewed Supply – New Demands

The dynamics of the rental market are changing: landlords are starting to shift strategies. Simply empty apartments are no longer appealing to market players. It's increasingly common to offer furnished, upgraded, and design-updated apartments, which sell at premium prices. Such modern apartments provide convenience and immediate move-in readiness, which many tenants have become crucial.

The differentiation in demands is more apparent: while some seek cheaper apartments in the suburbs, others prefer premium apartments with all-inclusive services. Thus, the competition is not only about prices but also service packages, location, building quality, and design.

Rental Price Trends

Despite the market climate favoring tenants, prices have not dropped significantly. According to CBRE's latest report, apartment prices rose by 1% monthly, while villas increased by 2%. Although this growth is much more modest than the double-digit rates of previous years, it still indicates a slightly upward trend.

This is partly because many tenants – especially newcomers or internal movers – are still willing to pay a higher price for the right services or locations. Still, the rental market has clearly shifted away from the previous, rapid price increase trajectory.

Strategic Rethink from Developers

The new market trend poses a challenge for developers. In previous years, speed dominated: new projects were brought to market as quickly and in as large a volume as possible. Now, however, 'viability over speed' has become the motto. Product differentiation, realistic pricing, and precise delivery schedules have become priorities.

Buyers and tenants are becoming more conscious, and only developments that truly serve their lifestyle and financial capabilities earn their trust.

Expected Trends

In the coming months, competition for tenants is expected to intensify further. Rental prices may even stagnate, especially in places where a large number of new apartments enter the market. For tenants, this offers an excellent opportunity for negotiation, especially for long-term contracts.

The premium segment can still expect price increases, but there will be more pressure to reduce fees or expand offers in traditional, service-less apartments.

Summary

Dubai's rental market is moving towards a new equilibrium. Increased supply, moderate demand, and increasingly discerning tenant expectations force owners to adapt. However, this change could be beneficial for all parties in the long run: tenants receive better offers and more choices, while landlords gain long-term, satisfied clients.

Dubai's dynamically developing urban environment remains attractive to international professionals and families, but the market now offers not only rapid growth but also more sophisticated, service-based rental solutions. Those now searching for a new home in the city will likely find better conditions than ever in recent years.

(The article's source is based on analysts from the CBRE global real estate advisory company.)