Dubai's short-term rentals surge as overall market shows signs of cooling
The shift reflects a maturing market where tenants are increasingly weighing short-term flexibility against long-term commitments, and where new government initiatives and increased supply are bringing balance to previously overheated segments.
According to new data from Bayut and dubizzle, demand for both monthly and daily rental formats has remained strong, particularly in lifestyle-centric areas such as Dubai Marina, Downtown Dubai, Business Bay, and Jumeirah Village Circle (JVC). The growth comes even as the general rental market enters a more measured phase, following nearly two years of aggressive rental increases.
Dubai's most searched rental areas in the first half of 2025 reflect this dual trend. While tenants are drawn to the flexibility and convenience of short-term leases, the long-term segment is cooling thanks to an expected delivery of over 72,000 new housing units this year. 'Dubai's rental market is starting to stabilise after a period of rapid growth,' said Haider Ali Khan, CEO of Bayut and dubizzle and a board member of the Dubai Chamber of Digital Economy. 'With more supply coming online, rents are easing, and tenants are benefiting from greater choice and affordability.'
Luxury short-term rentals continue to command premium pricing. Monthly apartment rents in Dubai Marina, Downtown Dubai, and Meydan City now range from Dh7,180 to Dh16,310. In the villa segment, Palm Jumeirah and Dubai Hills Estate remain top choices, with monthly rents stretching from Dh93,330 to Dh171,430. This sustained interest in waterfront and upscale suburban living reinforces Dubai's global appeal as a luxury lifestyle destination.
In the mid-tier segment, JVC leads for monthly apartment rentals with an average of Dh7,090, followed by Business Bay and Al Barsha, where studio and two-bedroom units start at Dh4,630. For cost-conscious tenants, International City, Deira, and Bur Dubai offer attractive options, with monthly apartment rents ranging between Dh3,080 and Dh12,990. Among villas, DAMAC Hills 2 (Akoya) is gaining traction for budget rentals, offering family-friendly homes from Dh12,960 to Dh15,750 a month.
Daily rentals are also seeing consistent demand. Downtown Dubai, Jumeirah Beach Residence, and Dubai Marina are favourites for daily luxury apartment stays, with average rates between Dh516 and Dh762. Villas on the Palm Jumeirah command up to Dh6,960 per night — a 14.6 per cent annual increase, reflecting persistent demand for exclusive beachfront experiences.
Mid-tier daily rentals remain active in JVC, Business Bay, and Al Barsha, with average rates from Dh384 to Dh472. JVC, in particular, saw a 5.6 per cent increase, averaging Dh415 per day. For affordable daily rentals, Bur Dubai, Deira, and Dubai Silicon Oasis offer compelling choices, with rates between Dh206 and Dh269. While Bur Dubai saw a modest 5.3 per cent decline, it remains a preferred destination for value-seeking renters.
Bayut's Smart Rental Index also suggests long-term rents are reaching a plateau. While certain areas continue to see gains, the pace of rental hikes has slowed. Affordable apartment rents rose by 7 per cent, although select units in Bur Dubai and Deira saw decreases of 6.2 per cent. Mid-range apartments posted modest growth of 1 to 6 per cent. Interestingly, asking rents for luxury apartments dropped by 1 to 5 per cent overall, though some properties in Downtown Dubai and Dubai Marina bucked the trend with increases of up to 3 per cent.
In the villa category, affordable units recorded gains of up to 9 per cent. Mid-tier villas rose by up to 7 per cent, but certain configurations in Al Furjan and JVC saw notable drops of up to 13 per cent. Luxury villas were more volatile — 5-bedroom units in Dubai Hills Estate surged by up to 53 per cent, driven by high demand and limited new inventory, particularly in premium enclaves like Palm Hills, Golf Place Terraces, and Maple. In contrast, 4-bedroom luxury villas saw price declines of 1 to 9 per cent.
Area preferences also shifted slightly in response to price movements and supply dynamics. Bur Dubai and Arjan have become increasingly popular for affordable apartment rentals, while Mirdif and Damac Hills 2 lead in budget villa offerings. Among mid-tier options, JVC and Business Bay continue to attract steady demand. For luxury seekers, Downtown Dubai and Dubai Marina dominate the apartment scene, while Dubai Hills Estate and Damac Hills lead for high-end villas.
Experts suggest that Dubai's evolving rental market — characterised by more measured long-term rates, growing short-term flexibility, and a spike in ownership interest — points to a more balanced housing ecosystem. Initiatives such as the Dubai Land Department's First-Time Home Buyer programme and the rollout of tech-enabled brokerage platforms are also nudging renters toward ownership.
Property experts expect further shifts in the market as more units enter the pipeline in the coming quarters. But for now, the short-term rental sector is clearly thriving — fuelled by lifestyle demand, digital nomads, and the city's enduring allure as a global hub for work and leisure.
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