Dubai’s rental market is entering a period of stabilisation as increased supply begins to moderate price growth across key segments, according to data from the Dubai Land Department (DLD) and real estate agency Allsopp & Allsopp.
In January, Allsopp & Allsopp recorded a 48 per cent increase in rental transaction volume alongside a five per cent rise in total rental value. The gap between transaction volume and value growth indicates that rents are no longer rising at the pace seen in previous years.
Year-on-year figures from the DLD point to further rebalancing in the market. Renewals declined by 15 per cent in volume and nine per cent in value, while new rental contracts fell by three per cent in volume and four per cent in value. The average lettings price across apartments and villas and townhouses has fallen 25 per cent year-on-year.
New supply to ease Dubai rental prices in 2026, says Allsopp & Allsopp
“After several years of consistent rental growth, we’re now seeing the market move into a phase of stabilisation. Demand is still very much there, but as more supply comes to market, particularly apartments, the pace of rental prices increases is slowing. This is a healthy sign for Dubai showing that the market is becoming more balanced and sustainable for the long term,” Lewis Allsopp, Chairman of Allsopp & Allsopp said in a statement.
Supply is playing a role in this shift. In the sales market, nearly 80 per cent of January’s off-plan transactions were apartments, with off-plan deals accounting for 78 per cent of total sales value. As more apartments enter the pipeline relative to villas and townhouses, the increase in inventory is expected to place further downward pressure on apartment rents.
Apartments have recorded a year-on-year dip of 11 per cent in rental volume and five per cent in value. This is where the largest price adjustment is expected to occur.
In contrast to apartments, villas and townhouses remain supply-constrained. Rental volume in this segment dipped ten per cent year-on-year and value fell just over one per cent. Prices in this segment remain competitive for tenants, supported by activity month-on-month.
Despite the moderation in prices, demand from tenants remains firm. Month-on-month, Allsopp & Allsopp reported a 70 per cent increase in listings, 50 per cent growth in registrations, and a 53 per cent rise in viewings compared to December.
The agency noted that January figures tend to be higher month-on-month due to an influx of residents at the start of the year, but expects the activity to continue throughout 2026.
The data points to a rental market that is not slowing but recalibrating. With demand holding firm and apartment supply on the rise, rental prices in Dubai are expected to even out over the course of the year.
