Rents in Dubai are falling in some communities and rising in others, as a rise in housing supply gives tenants more choice and more room to negotiate, real estate experts told Lana.
Since the start of the year, rents have fallen by 1.1 per cent, though they remain 5.6 per cent higher than during the same period last year, according to real estate consultancy Cavendish Maxwell.
“The movement has also varied considerably across Dubai, with some areas beginning to see a softening in rents while others continue to record growth,” said Ali Siddiqui, Research Manager at Cavendish Maxwell.
Where have rents fallen in Dubai?
“Areas such as Dubai Creek Harbour, Downtown Dubai and Business Bay have seen rental rates soften compared with the same period last year,” Siddiqui said. “In contrast, areas including Town Square and International City have continued to record rental growth.”
“Overall, we are seeing a more mixed rental market, with the performance increasingly varying from one community to another, rather than rents falling across the board,” he added.
In addition, – according to Jacob Bramley, Lowri Scrivens and Naz Mehrabadi, Leasing Managers at betterhomes – the “greatest pressure” are being noted in communities where “available supply has increased most significantly, particularly across the apartment market. Areas such as Downtown Dubai, Business Bay and Jumeirah Village Circle are seeing greater competition between landlords as tenants have more choice.”
“Available stock has increased by 70–100 per cent in some communities, putting greater pressure on new rents. It is therefore less about rents broadly ‘falling’ across Dubai and more about new-let pricing becoming more competitive in areas with increased availability,” they said.
Which property types have seen rents fall?
“Rental rates for both apartments and villas have declined since the beginning of the year, while townhouse rents have increased over the same period,” Siddiqui said. “Villas have recorded the largest decline, followed by apartments.”
“However, both segments continue to record higher rental rates compared with the same period last year, with villa rents up 1.2 per cent and apartment rents up 5.8 per cent. This points to a market that is cooling at the margins rather than undergoing a broad correction,” he said.
Echoing the sentiment, the betterhomes experts explained that “apartments are seeing the greatest pressure. The supply pipeline is heavily weighted towards apartments, with approximately 74,100 homes expected to complete during 2026 and apartments accounting for the majority of planned deliveries.”
“This is creating greater competition between landlords, particularly in apartment-heavy communities. By comparison villa and townhouse supply remains relatively constrained,” they explained.
Why are Dubai rents falling?
The softening of rents is being driven by a “combination of factors,” according to Siddiqui, who attributed the shift to “a significant volume of new residential units” that have been handed over across Dubai over the past few months, giving tenants “greater choice and more negotiating power.”
“At the same time, demand has moderated compared with the exceptionally strong levels seen in the last few years, with the number of residential rental contracts declining by 1.3 per cent so far this year. Together, these dynamics point to a market that is finding a new equilibrium after several years of exceptional growth.”
“The primary driver is increased supply and greater choice for tenants. Available stock has increased significantly across many communities. This has changed tenant behaviour,” betterhomes said.
“Tenants are no longer necessarily moving because they have to; they have more ability to compare properties, negotiate and look for better value. We are seeing some tenants downsize to reduce their monthly outgoings, while others are using the increased flexibility in the market to upgrade or move into a better property for similar money.”
According to betterhomes, tenant enquiries at the company were up 20 per cent year-on-year alone in Q2 during the backdrop of regional instability, demonstrating that rental demand itself remains strong.
Are landlords cutting rents or offering rent-free periods?
“We are seeing an increase in the use of rent-free periods and other incentives, although this remains very much on a case-by-case basis and varies by property and location,” Siddiqui said.
“It is also worth noting that landlords are not broadly reducing rents across the market. In the first half of the year, only 7.7% of rental contracts recorded a decline in rents, while 36.9% remained stable, with the remainder recording an increase.”
“Overall, landlords appear to be adapting where needed, but the broader market dynamic does not suggest any significant pressure to discount,” he said.
“There is definitely greater willingness from landlords to be flexible, although we are seeing that flexibility expressed more through payment terms and start dates than simply offering rent-free periods,” the betterhomes team said.
“Tenants are moving away from larger upfront payments, with single-cheque agreements falling from 29 per cent to 26 per cent, while three-, six- and twelve-cheque arrangements all increased. This reflects a greater focus on cash-flow flexibility and gives tenants more negotiating power.”
“Our brokers are increasingly finding solutions that bridge the expectations of landlords and tenants without simply reducing the headline rent. That could mean restructuring the payment schedule, agreeing a different start date or finding other commercial terms that work for both parties. Ultimately, the landlord who is realistic on both price and terms is better positioned to secure a tenant in the current market,” they said.
Are tenants moving to cheaper areas?
“We are seeing both trends at play in the market,” Siddiqui said. “While renewals account for the majority of rental activity, the number of renewal contracts has declined compared with the same period last year, while new contracts have increased over the same period.”
“This suggests that some tenants are changing properties rather than simply renewing their existing leases, although this does not necessarily mean they are moving to more affordable areas, even if that is the case for some. Overall, it is less a case of one trend dominating and more a reflection of tenants having more options than they have had in recent years and increasingly acting on them.”
According to the betterhomes team, both trends are happening, but there is a clear shift towards tenants negotiating better value within their existing communities.
The team noted that tenants are exploring the wider market and comparing what is available, and in many cases they conclude that the cost of moving does not quite justify the benefit.
“Agency fees, deposits, moving costs and the disruption of relocating all need to be considered. As a result, we are seeing tenants go back to their existing landlords and negotiate better terms, while landlords are increasingly recognising the value of retaining a good tenant rather than risking vacancy. The key change is that tenants now have more leverage. Landlords are competing not just with the property next door, but with the wider pool of available stock across their community,” betterhomes said.
How much new supply is coming, and where?
Siddiqui said Dubai’s residential pipeline remains active, with around 39,000 units scheduled for handover in the remainder of 2026. However, he noted that actual deliveries are likely to be lower, as some projects may face delays or be pushed into later periods.
“Areas such as Jumeirah Village Circle, Dubai Science Park, Business Bay and Dubai South account for the largest share of upcoming handovers, collectively representing around 30.4 per cent of all expected supply over the next few months. These areas are worth monitoring closely, as a concentration of new stock in specific communities can have a more pronounced effect on local rental dynamics than the headline citywide figure might suggest,” he said.
According to the betterhomes team, Dubai is on track to see around 55,600 new residential units handed over in 2026, with 23,600 units already delivered in the first half of the year. The team added that this trend is expected to continue over the next few years.
“Nearly half of this supply (45 per cent) is concentrated in five areas: JVC/JVT, Dubai South, MBR City, Business Bay and Dubailand. The bulk of these units being studios or one bedrooms, signals a big focus on apartments. Looking ahead to 2027, the picture is shaped by what has already hit the resale and rental market this year. Live rental listings on Property Finder jumped 74 per cent from Jan 2026 to August 2026.”
“JVC and Business Bay remain the primary supply hotspots, together accounting for about 23 per cent of the market’s overall listing growth between January and August. Dubai Creek Harbour and Dubai Hills are growing fastest in percentage terms, albeit from a smaller base. This surge is being driven by three forces: a wave of off-plan handovers, short-term rental units converting to long-term leases, and accidental landlords. The upshot is that renters now have significantly more choice than they did at the start of the year. And the supply will not be running out anytime soon,” they said.
Will Dubai rents keep falling?
“We would expect rental growth to remain more subdued over the next 6 to 12 months, with the supply pipeline for the remainder of 2026 remaining active and likely to weigh on rents in certain communities, particularly where new handovers are concentrated,” Siddiqui said, adding that the impact is unlikely to be uniform across Dubai and will depend on the balance of supply and demand in each community.3
He noted that with rents still above last year’s levels, the market is not experiencing a broad-based decline, and the next six to 12 months are likely to bring a gradual rebalancing, although some areas may see further softening.
According to the betterhomes team, rents have fallen, but the pace of the decline is the more telling indicator. The team noted that prices are down 6.2 per cent quarter-on-quarter and asking rents have dropped 22 per cent since March.
However, the decline is losing momentum quickly, with the drop from July to August coming in at under 1 per cent, which the team said suggests asking rents may be approaching a floor.
“Tenants have certainly been able to secure lower rents than earlier in the year. The question now is whether that trend has further to run. In communities still absorbing high volumes of new supply, there’s likely still room for rents to soften further. But across the market as a whole, the picture increasingly looks like stabilisation rather than continued decline,” they said.
Which areas could see more rental pressure?
“Areas with a high concentration of upcoming handovers could see greater rental pressure over the coming months, particularly as the additional supply gives tenants more choice,” Siddiqui said. “Jumeirah Village Circle, Dubai Science Park, Business Bay and Dubai South currently account for around 30.4% of the expected residential supply for the remainder of 2026, so these areas are likely to be worth watching closely. The extent of any pressure will, however, depend on how quickly the new units are absorbed and how demand develops in each community.”
According to the betterhomes team, two distinct patterns are emerging. The first involves areas where rents are falling even though demand is holding up, simply because supply is growing faster than tenants can absorb it.
The team pointed to Meydan, Dubai Sports City, Al Furjan and the wider Dubailand corridor as the clearest examples, where asking rents have fallen by as much as 48 per cent, registered rents are down around 13 per cent, and supply has risen 94 per cent.
The second pattern, the team said, is straightforward oversupply, concentrated in JVC, JVT and Business Bay, the same communities absorbing the largest share of new handovers in 2026.
Where are rents likely to hold or rise?
“Yes, there are still areas where rents are likely to remain relatively strong, particularly communities where demand continues to be supported by limited available stock, established amenities and strong connectivity,” Siddiqui said, adding that the townhouse segment in particular has held up well, occupying a sweet spot in the market for families seeking the feel of villa-style living at a more accessible price point. He noted that this has supported demand for townhouses even as villa rents have softened.
The areas likely to continue performing well are established communities where supply is more limited and demand is already strong. The team said places such as Dubai Hills, Emirates Living, Palm Jumeirah, JBR and established villa communities like Al Barari should remain fairly resilient, betterhomes further explained.
“We’re also seeing very strong demand for villas and townhouses, particularly family homes, because there simply isn’t as much supply compared to apartments. That being said, we don’t see rents increasing across Dubai at the same pace we’ve seen over the last few years. With more new properties coming onto the market, tenants will have more choice, so landlords will have to be more realistic with pricing. Going forward it will come down much more to the individual community and property, location, quality, pricing and how much competition there is, rather than looking at Dubai as one market,” they said.
What can tenants and landlords expect in 2027?
Siddiqui expects tenants to keep enjoying plenty of choice and bargaining power in 2027, especially in areas where new supply has been absorbed gradually. Tenants willing to be flexible about location should find competitive options, he said, and landlords in supply-heavy communities are likely to keep offering incentives for some time.
Landlords, meanwhile, will need to price realistically. Where supply is high, he said, holding out for peak rents could leave properties empty for longer, while those prepared to offer competitive terms on price, payment flexibility or incentives stand a better chance of keeping existing tenants and attracting new ones.
According to the betterhomes team, 2027 will be a “much more balanced market.” After a couple of years of strong rental growth, in which some landlords saw returns of close to 110%, the team said the market is entering a healthier, more sustainable phase. Rents remain strong but are settling at more realistic levels, which the team considers good news for both sides.
With a large volume of new supply arriving, tenants should have more options and greater scope to compare and negotiate, the team said, though this will not necessarily translate into lower rents, as outcomes will vary by area and property quality.
For landlords, getting the price right from day one will matter more than ever, according to the team. Simply matching or outbidding a neighbour’s asking price will no longer guarantee a quick let. Owners who keep their properties in good condition, price accurately and know their local competition will be best placed. “Ultimately, good properties will still achieve good rents, but overpricing will become much harder to get away with,” they said.
Dubai is not one rental market
“The next 12 months will be an important period to watch, particularly as new supply continues to enter the market and demand patterns become clearer,” Siddiqui said. “How quickly that supply is absorbed will be a key factor in determining the direction of rents across different parts of the city.”
“The biggest thing to remember is that you can’t really look at Dubai as one rental market. Two communities can perform completely differently depending on the amount of new supply, the location, amenities, schools, accessibility and the type of tenants they attract. For example, Tilal Al Ghaf and DAMAC Hills are only a couple of minutes away from each other, but they attract very different markets. Tilal Al Ghaf is positioned more towards the luxury end, with higher pricing and strong demand for premium homes, while DAMAC Hills has a much broader range of more affordable options and can therefore see a different level of demand and rental movement.
“It’s a good example of how two communities can be right next to each other but perform very differently because of the product, pricing and tenant profile. From a leasing perspective, we’re becoming much more specific when advising landlords. We’re looking at what is actually available around them, what has recently rented and what tenants are responding to.
“This will become even more important in 2027. Landlords who understand their competition and price based on the actual market, rather than just what they want to achieve, will put themselves in a much stronger position,” betterhomes concluded.
