Rents in Dubai could finally be reaching a ceiling

Rents in Dubai could finally be reaching a ceiling

Rental rates across Dubai are showing possible signs that they are reaching a ceiling, even as the average apartment and villa rents continued to increase in the second quarter of 2023. Recording upticks of 6% and 3%, the two segments reached highs of 21% and 23%, respectively, in the first half of the year.

Findings from a new report by property management and real estate services company Asteco noted that almost 11,000 residential units were delivered in Q2 2023, with apartments accounting for 9,400 units of this stock.

Although rental rates continued to grow in 2023, market indicators point towards a rent ceiling.

The report cited the difference between listings and contracted rates, as recorded by the Dubai Land Department (DLD), as a key indicator of a ceiling, and stated that apartment and villa units were often renting at the lower end of the range, even though they were not advertised as such.

The report further stated the pace of increase has slowed within some communities and asset classes, particularly within the villa segment. Areas such as Meydan, Arabian Ranches 3, and Al Furjan saw minimal rental growth due to increased supply in Q2 2023.

Expensive places

Neighbourhoods that recorded the largest jump in rents in